Bull Market Explained

Trading is a sport in which you need to know the trend in order to get maximum performance. The market of bonds, commodities or stocks can have various evolutions which change not only every day, but even from one minute to another. It is important to be connected to these modifications as soon as they happen in order to be able to make the right and profitable decisions.

The idea of bull market may refer to the way any product becomes more asked for by clients. The term might have a funny shade but it is a direct word in a very direct world, where time is extremely precious. It was inspired by the way the raging bull attacks. He lifts his horns up in the air to appear bigger and more threatening to his adversary. On the other hand it is somehow connected to the general movement of the market, when all the participants in it tend to move automatically in the same direction as a herd.

The bull market is a moment when the general tendency of the prices is to rise. This can be fueled by investor’s optimism and high expectations or by an economic recovery. In such periods people usually create diversified portfolios, thus reducing the risk of keeping all their eggs in one basket. Smart investors take advantage of these times to register great profits.

To better understand this term you can compare it with the idea of bear market. This financial term is also a reference to the way a bear swipes its paws on the ground while attacking. So, when the market is down it is called like this. Investors reduce their expectations and their profit in such periods. They are also very careful about making new investments and sometimes they prefer to stay away from the market until it becomes friendlier.

Unlike the general trend, when people are afraid of buying anything, they don’t have any doubt when buying gold bullion. That is why in periods of economic recessions the price of gold grows. Being in great demand as many investors shelter their fortune as assets rather than as currency, it can be sold at higher prices.

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