What is the Difference Between Bullish and Bearish in the Stock Market?
If you had watched the famous Indian web series Scam 1992, you might have been well-known about the “bullish and bearish” terms in the stock market. Hence, the term “bull vs bear” represents the ensuing trends in the stock market. Bull markets generally coincide with robust economic growth, whereas the bearish phase leads to a rise in an economic downturn.
The Bear and Bull markets affect the economic cycle, and this is where an investor should lookout for the market’s future scope. Analyzing the market and implementing new trading strategies from the market experts will help you choose the best-performing stocks in the market that would fetch better returns.
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This blog will discuss the factors that play an essential role in determining the bearish and bullish stock market. The key elements are listed below:
Supply and Demand:
The bull and bear market is partly a result of the supply and demand for securities. Many investors wish to purchase securities, while others would prefer to sell them. This result in the rise of the share price. In a bear market, the demand is significantly lower than supply as more people are looking to buy rather than sell it. Similarly, in a bull market, the demand would rise as investors would pay to buy the stocks at any price.
Changes in the economic activities:
No matter whether the market is bull or bear, the economy changes from time to time. In a bull market, the economy increases as customers tend to spend more due to the wealth effect. Similarly, in a bear market, consumers set stricter priorities by reducing their spending. This bearish behavior leads to lower sales and a fall in business profits, leading to a negative impact on GDP growth.
The investor’s psychology is directly proportional to the stock market performance. In a bull market, the stock price increases and allows the investors to invest their money with the hope of attaining higher profits. However, in a bearish market, the psychology of investors reflects in such a way as to withdraw the money out of equities and hold on to their investments until the market gains a positive phase.
Overview of Investments:
Let the market be bear or bull; it’s your choice to invest. You can also gain profits in a bear market and also face loss in a bull market. It’s your strategies and knowledge that will help you in attaining the earnings from your invested stocks. Stay updated with the current market trends to make smart trading decisions.
Now, are you set to start your trading journey in the Indian Stock Market?
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