What is a Bull Market and How do Investors Survive in it?

real estate investment

Bull market refers to that sustained period of time in the financial market when the prices rise up. This period of time can last from a few months to a whole year. Although the term Bull market can be applied to anything that is related to trade for example bonds, real estate, currencies and commodities, Stock market is what it is mostly used for.  Since during trading, it is common to see the rise and fall in the prices of securities continuously, the term Bull market is used when this lasts for a longer period of time, sometimes for even years.

Now this Bull market usually takes place when the economy is strong or is becoming strong which may occur due to a growth in the GDP or a decline in the unemployment. Bull market often leads to coinciding with corporate profits and increases the confidence of the investors.

How to survive the bull market?

Before knowing the methods that help to survive the bull market we should first know the reasons to survive the bull market. So during the bull market, the economy of the country is strong and employments rates are also high. This leads to the profit of investors. But due to these rising profits more investors are attracted towards it thus the bid prices go down. This leads to an increase in business competition, as a result all bull markets eventually slow down.  Here the investors have to face a tricky situation to survive the slowing bull market.

Although the bull market exists for a longer period of time but they don’t last forever.  The key to surviving through a bull market is to shift the resources away from growth plays and reach for the private transactions, dividends and also target the international exposure.  Also it is necessary that an investor should have a better understanding of the long term market trends on the basis of the historical perspectives. By adopting these measures it becomes easy to navigate through the slowing down of bull market especially for an average investor.

Also to survive through a bull market there are some preventive action that can be taken by the investors. These measures are as listed below.

  1. An investor should try to buy the stocks early that are in the trend to avail the benefits of the rising prices. And then they can sell it when they reach the peak point.  
  2. Also since during the Bull market the losses that an investor suffers are very minor and for a temporary period of time, the investor should try to in invest in more equity to obtain a higher probability of making a return.

Thus with a proper planning and correct strategy one can make a lot of profit by investing in the bull market. The investors need to be wise enough to understand the quality of investments and the current scenario of the bull market. Since bull markets can greatly influence your investments it is highly recommended to understand the market trend first and then go forward with it.


Anum Yoon is the founder and editor of Current on Currency. She loves all things personal finance, which is why you'll find her work all over the PF blogosphere.