The economy fluctuates between two market trends called bear and bull. These two are the opposites of each other. Investors and market players certainly find the bear market as the unfavorable one because it is a period of loss. Meanwhile, the bull is perceived as the period of gains and opportunity for money making.
A bull market is referred interchangeably with rising market as it occurs when the economy is going up and investment prices evidently rise faster than their historical average. This market trend particularly occurs as a result of an economic recovery or boom. The prices of the securities during this prolonged period are either rising or expected to rise. Contrary to a bear market, a bull market is characterized by optimism where investors are confident and expectations on favorable and strong results will persist. Although, caution is needed during these times because there will be difficulty in predicting when will the market trends change. Furthermore, contributing to this difficulty is the role sometimes played by the psychological effects and speculation in the markets.
In order to take advantage of this favorable market trend, investors buy more securities in anticipation of future price increases which equates to higher gains.
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