What do you do if it is a ‘bull’ or ‘bear’ market

First, let me tell you that markets are termed as ‘bull’ or ‘bear’ markets largely due to the way in which these two animals attack their opponents in a tough fight. In a general fight, a bull tends to show extreme aggression by plunging its horns up in the air. It clearly gives its opponent the message that it is ready for a tough tussle. On the other hand, a bear has a tendency of swiping its paws down showing restraint. Market experts use ‘bull’ and ‘bear’ markets to describe the way the market has moved in a particular session. For instance, if a market session sees heavy buying, experts and analysts call it a bullish market whereas if it sees strong selling, they call it a bearish market. In simple words, if stocks tend to move upwards during a trading session, market is said to be bullish and if they slump, it is said to be bearish.

Following are some of the major factors that help us determine whether a market is bullish or bearish:

  • Demand-supply situation for securities has a huge say in knowing whether the market is bullish or bearish in that particular session
  • Investor psyche, economic policies of the government, and crucial changes in terms of economic/commercial activity in the country play a very significant role in pushing the market into bullish or bearish zone

As an investor, all that you have to know is to stay focused on the market movement, take the help of professional experts, if necessary, to read the movements, and plan your bids at higher or lower prices for the stocks that you want to buy. Remember, the general norm is investors tend to buy when it is bullish and sell when it is bearish. However, please remember there are no hard and fast or general rules that govern the market. If there were some, then all of us would have got a hang of them and made fortunes. Yes, it is important to know whether the market is bullish or bearish and plan your investment strategy in the stock markets based on that. However, please do not undermine the role of a professional expert whose eyes can pick and read those things that we can’t and who knows what a correct investment strategy will be based on your risk profile and the overall market condition. Please remember it may not always pay to be conventional in your approach to trading in the stock market. As they say horses for courses is the right approach.

Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing.

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