Unveiling Bullish Signals: Spotting Investment Opportunities
Investors who wish to do well in different stages of their investment plan must take into account that the market is not a static entity. The ebb and flow in the shape of bearish and bullish markets is part of how the financial markets operate. Rather than fretting about market turbulence, investors must prepare themselves for both bear and bull markets. A bullish market is a colloquialism for when the prices of assets increase and the market experiences a sudden upward growth. It is commonly agreed that stock prices go up by 20% in a bull market. There are many ways to take advantage of this and investors and traders alike employ strategies to buy and hold or retrace their stocks to make the most of this period.
Investors in this period feel a sense of confidence and the market is usually marked by a spirit of positivity. When the GDP is going strong and the rate of unemployment is at an all-time low, this is usually met with an increase in corporate profit. Trading in this period usually goes up and selling becomes easier as the market is not flooded with panicked investors trying to get rid of their stocks to make a last-minute profit. Investors in a bullish market buy and sell their stocks quickly for good prices. Companies that might be doing well might increase dividends which results in increased profit for shareholders. The best way to take advantage of this market is to buy and hold stocks to ensure that the stock continues to increase in its price and the investor can sell it at a profit at a later date. Increased buy and hold is another technique that involves adding to one’s stocks in the hope that the price will continue to rise.
The retracement is a strategy adopted by several investors wherein investors take into consideration that there will be short periods of downward trend in the stock market. Here, buying the dip during this period will be profitable for the investor when the market goes back up. Another very hands-on strategy is the full trade swing wherein investors will use short-selling to capitalize fully on the bullish market trend. There are many strategies that investors can potentially adopt. They must however keep in mind their capacity for risk and diversification of their portfolio. With a clear plan in mind, investors will be able to capitalize on bullish markets in the best possible manner.
Sources:
https://www.investopedia.com/terms/b/bullmarket.asp
https://www.investopedia.com/articles/stocks/09/profit-in-bear-bull-markets.asp
https://time.com/personal-finance/article/what-is-a-bull-market/