You may have heard the terms “bull market” or “bear market” in a news report or from a talking head in a fancy suit. If you’re not sure of the connection between a farm animal, a wilderness predator, and the economy, you’re not alone. But fear not, we’ll clear that up for you! In this article, we’ll look specifically at the farm animal. 🐮
Here are Five Fast Facts on bull markets:
- 🤔 Which Is Which - The idea of a bull and bear market comes from how each animal attacks - a bull thrusts upward with his horns, but a bear swipes downward with its paws. So, a bull market is one that is trending up and a bear market is one that is trending down. Typically, these are periods of rising or falling that last months or years, otherwise it’s just normal fluctuations.
- 👍 That’s No Bull - There’s no precise definition of a bull market, but rule of thumb suggests it’s when stock prices rise by more than 20% from recent lows. There’s usually a lot of optimism and investor confidence that helps keep pushing things higher.
- 📈 Building A Trend - Investment banking firm Charles Schwab has done a quarterly survey of everyday investors since 2021, and the current level of bullishness is at its highest level since the survey began. Over half of respondents are bullish, up from 32% at the end of 2023. More bull for everyone!
- 💰 Driving The Trend - The indications of avoiding a recession and the anticipation of the Fed’s reduction of interest rates are the biggest factors in the bullishness of the markets right now. The S&P 500 has gone up 7.7% so far this year. Just think how great it would be if it actually hit 20%!
- 💲💲Riding The Bull - So how do you make money off of a bull market? There are several strategies with different levels of risk, but the simplest one is your everyday, garden variety buy-low-sell-high. The others are simply higher risk versions that try to squeeze money out of increasingly small ups and downs in the market along the way.
🔥Bottom line: As with all things investing, work with your financial planner to determine the best way to handle this bull market. If you play your cards right, you just might ride the bull to some really nice returns!
Are you bullish on the market right now?
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