When you start getting involved in investing, you will be introduced to phrases used throughout the industry such as "bull market." The concept of a bull market is actually quite simple to understand, but it is extremely important for every investor to know the proper use of this phrase and avoid overusing it or using it in appropriately.
In General A Bull Market Is A Good Thing
According to MoneyInstructor.com, a bull market is a situation where consumer confidence and stock prices on the NASDAQ and New York Stock Exchange are both very positive. To be classified as a bull market, the sustained values of both exchanges need to be increased by 20 percent or more over a period of a few days. Anything less than a 20 percent rise in market values is usually not classified as a bull market.
Bull Markets Apply To More Than Stocks
According to Investopedia.com, a bull market can occur with bonds and commodities as well. Any situation where securities or commodities are traded through an organized market can be classified as a bull market when there is sustained growth.
The good thing about a bull market is that investors can get into the market and make a lot of money in a short period of time. The bad thing about a bull market is the financial losses that can occur when investors get caught with overvalued securities after the bull market has bottomed out.
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