A bull market is a condition during which the share prices go high, thus encouraging buying of shares. But before investing, it is good to know is the bull market good or bad?
But before that, you also need to pull yourself up and actually understand the bull market meaning in the first place. Because once you do that, you will get a much better understanding of its implications and then using it to your advantage.
The right idea in your mind helps you build the right strategy and ultimately achieve your investment goals.
To enter the technical bull market, India’s stocks are being joined by other Asian markets in the hope that the Indian government’s step will contain the stimulus package that will release the economic damage.
According to Rakesh Jhunjhunwala (Indian businessman and investor)(chairman of Aptech Limited and Hungama Digital Media Entertainment Pvt. Ltd), he sees the fresh bull market despite Covid 19.
He pinned up the hopes on various reforms like RERA, GST, and IBC, whose benefits could be seen in the economy.
Which Is Good A Bull Or A Bear market?
Bull and Bear, both the terms are used one after the other in the stock market. In general, it describes the phase, and the depicts overall functioning of the share market.
On one hand, a bull market is when the stock price rises, and the economic condition is favorable while a bear market is when the stock prices are declining at a rapid rate.
However, investing in both the market can prove to be fruitful if done strategically, but in general, investing in a bear market is riskier as compared to a bull market.
How To Identify Bull Market?
Before getting into a trade and start investing in a bull market, it is important to identify the signs of a bull market to get an understanding of where to invest in the bull market.
The right identification and knowledge help you in planning your trading strategically thus offering you maximum benefits.
Some of the signs that give a clear indication of the beginning of a bull market are:
Recovering of economic condition
Lower interest rates
Higher industrial production
Rising of technical and cyclical stocks
MACD; Moving Average Convergence Divergence) the line is above the trigger line and began to rise.
Another indicator, the bullish percent index, represents the bull alert and confirms the bull pattern.
How To Identify Bear Market?
A bear market is a vice versa of bull markets. But how would we describe it?
“Bear market” is a phrase that is used to showcase or describe the pessimistic and dropping economic environment.
There could be a downfall in the rates or stagnation could be seen. Let’s see the signs that represent the beginning of the bear market:
Falling in economic condition.
Interest rates rise up
Industrial production falls.
MACD indicator falls and continues to fall below the trigger line.
The bullish pattern indicator represents a bear alert or bear confirmation pattern.
Whether it is a bull or bear market, a wrong investment can impact your finances, thus impacting your personal portfolio.
Here, the right share market prediction of when the bull or bear market arrives and how long it is going to last is generally difficult to judge.
At this point, the decision of selling a stock is more difficult than buying a stock. However, it is recommended to invest in the market in both conditions, especially when you are planning to invest in the long term.
So, here analyzing and with your personal risk tolerance, you can choose to invest in the bull or bear market by picking the right stock that has the least impact on your portfolio.
Therefore, it becomes important to make use of the right strategies that help you in planning your investment with the least involvement of risk.
In all, to get the least impacted by the bull and bear market trend, stick to the investment strategy, and keep risk tolerance in mind.
Planning to invest, start now by opening a Free Demat Account
Impact of Bear Market
However, a bear market is generally represented by the continuous fall in stock prices, but still, some investors prefer to focus on two fundamental principles:
A bear market is only bad if you want to sell your holdings
The continuous fall of the stock price can prove to be valuable and beneficial for long-term investors.
In all, the experienced investors generally see this phase to be the one when they can actually buy their favorite and value stocks at a cheap price, whose price will grow with the span of time thus offering them good returns over the long term.