The opposite of a bullish market

the opposite of a bullish market

Despite some sharp decreases and market corrections along the way, prices have now reached an overall high.

Bull market definition and indicators

​​A bull market usually means that there has been a 20% rise in prices over some time (from months to years), after a previous 20% decline, followed by another 20% decrease. If the prices rise or fall 10% or less, it is considered a market correction phase.

There are three key indicators that investors use to assess market conditions:

1. Price-to-earnings ratio (P/E)

One of the key indicators is the price-to-earnings (P/E) ratio. When the stock price to each dollar of earnings per share starts to rise, investors tend to start selling their shares because if the earnings drop, the P/E ratio rises. Monitoring the P/E helps investors make decisions on their investments.

2.

The opposite of a bullish market

In other cases an investor might anticipate gains in a specific industry, stock, bond, commodity or collectible. If an investor is, say, bullish about ABC Corp., this means that he or she thinks that specific company’s shares will climb.

A bull market conveys a related meaning.

It exists when the prices – normally the closing prices – of securities or indexes that track a set of securities, typically those of equities, rise. While not every stock will necessarily increase, the market’s main equity indexes will.

For example, during a bull market the Dow Jones Industrial Average and the S&P 500 can be expected to climb, even as some individual equities and sectors may not. Unlike a bear market, there is no universally accepted percentage gauge for how much a market has to rise before it qualifies as a bull market.

What’s the opposite of a bull market

Bearish) Explained in One Minute

How long do bull markets last?

Bull markets can last anywhere from months to even years and often coincide with the four phases of the economic cycle: expansion, peak, contraction, and through. The start of a bull market can also be an indicator of economic prosperity and growth.

It is impossible to predict the precise times a bull market will begin and end, and the exact dates can only be determined in retrospect.

A bull market starts when investors have the feeling that prices are beginning to rise and trust that they will continue to do so.


If investor confidence is high, they begin to buy and sell more stocks, which drives up the stock prices. It creates a bull market as prices increase along with the demand.

Are we in a bull or bear market?

The term bull market describes an upward price trend in the market, whereas a bear market describes declining prices. Investors can take bullish steps that drive up investment prices.
Bearishly, investors would assume prices will fall and are thus more likely to sell, driving prices down.

The longest ever bull market started in 2009 after the financial crisis, and it ended abruptly with a sudden Covid-19 pandemic-induced stock market crash on the 20th of February 2020.

However, global stock markets recovered at a remarkable rate, and the crash ended only a few months later, on the 7th of April 2020, when global stock markets entered a bull market again.

Since the financial crisis of 2008, the stock market has been growing.

The opposite of a bullish market24

If a company is experiencing high turnover, it means the company has top-line growth. Furthermore, top-line growth should usually increase in line with the GDP and is, therefore, a good measure to reflect demand.

Conversely, business top-line growth shows the investment potential for investors.

3. Bottom-line growth

If businesses improve their profitability, it shows potential and encourages investors to buy their stocks, lured by a high return on investment.

Usually, in a bull phase, several private companies choose to issue an initial public offering (IPO), driven by healthy economic conditions and high investor confidence.

Main characteristics of a bull market

An overall bull market may encounter dips along the road, referred to as market corrections, but in general, the underlying price trend will continue to rise.

The opposite of a bullish markets

To make informed investment decisions, it is critical to grasp the distinctions between bull and bear markets.

What happens after a bull market?

When a Bull market comes to an end, a bear market follows, which is often characterized by equities dropping by 20% or more from their recent high. Dwindling market confidence, declining corporate profitability, and recessions are all common occurrences during Bear markets.

How do you profit from a bull market?

The ability to maximize the potential of the instruments available in any market is essential to achieving success.
The use of long positions in stocks, ETFs, and call options is appropriate in bull markets and periods of strong market performance.

The opposite of a bullish marketing

How can you tell if it’s a bull or a bear market?

There isn’t a clear-cut switch that indicates whether we’re in a bull versus a bear market.

The market is cyclical, so timelines can be very hard to predict. There are also natural pullbacks that can indicate optimism or pessimism, so sometimes it can be hard to discern which type of market we’re in.

Typically, investors stick to the “20 percent rule”.

This means the market rises 20 percent over a period of time (two months or more is a good general rule) it can be considered a bear market; the opposite would be true for indicating a bear market.

Often, it’s only possible to tell if we’re in a bull or a bear market after we’re already in it.

Bull Vs Bear Market: is there a winner?

Some investors have opinions on which type of market is better than the other.

It means that more investors would want to invest in particular stocks, which would, in turn, increase demand as well as prices.

3. High business profitability

A bull market is a reflection of the current economic and business environment.

If an overall business climate improves, naturally, it raises more interest in investors. In a growing and healthy economy, companies tend to increase their bottom line and profitability.

Therefore, more investors choose to buy.

What is more, during positive economic growth, more private companies likely issue an initial public offering, and an increase in IPO activity would then further grow a bull market.

But businesses may be overvalued on paper after the IPOs, leading to market corrections or even a bear market.

For instance, someone nearing retirement may want to steer clear of individual stocks since they can be quite volatile. Angling towards investments like ETFs and bonds might instead be in order.

On the other hand, if you’re still far from retiring, you might want to take a chance on individual stocks.

Their volatility and high-risk nature makes their return potential also much stronger. Since it’ll be a while until you retire, you can risk a bit for those earnings.

As your portfolio ages, you shouldn’t just leave it completely alone.

Instead, you’ll want to rebalance your investments. This entails bringing your portfolio’s complexing back to your intended asset allocation. The necessity from this is derived from returns affecting your portfolio over time.

In the end, there is no way to ensure gains in the investment market.

Share prices weren’t longer justified, which caused a market crash in 2000. This boom ended with a bear market with a 49% S&P 500 decrease between March 2000 – 2002.

4.

Longest bull market to date – 2009 to 2020 (131 months)

The longest-lasting bear market in history, longer than the one after the Great Depression, started after the financial crash in 2009. This market boom was driven by stable economic growth, soaring corporate profits, and low-interest rates.

Unemployment was at an all-time low, and the quality of life was improving globally.

Further growth of dot-com boom tech companies like Apple, Amazon, Facebook, and Google made them the most valuable companies in the US. The S&P 500 saw 334% gains over the course of 2009 and 2020.

Things abruptly ended when the Covid-19 pandemic-induced shock caused a major market crash in February 2020.

These are the times when prices are on the rise or there are strong expectations that they will rise in the near future.

  • Think of a bull, rushing forward, pushing those prices upward with its horns.
  • A bull market is characterized by plenty of optimism, high expectations, and a high level of investor confidence in general.
  • Usually, bull markets are determined by a 20 percent rise in stock prices. This is often preceded by a drop in prices, and comes before a decline in prices.

What type of trading works in a bull market?

If you’re a bullish investor, you’re buying a stock with the expectation that it will go up in price.

Bull markets are the time to go longer in positions, as they are more likely to appreciate in value during these times.

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