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|Bullish Vs. Bearish | What Is The Difference? by emilyedward: 9:11am On Jan 17|
Financial markets fluctuate, with indexes going up and down based on different internal and external factors. Investors are usually excited by these performances, and investors trade between https://learn.bybit.com/trading/bullish-vs-bearish-markets-how-are-they-different/. When there are constant gains, some investors expect the same to continue while others worry that the gains may come to an abrupt stop.
What it means to be bullish
A bullish investor (also known as a bull) expects the price of a certain asset to rise. This can apply to a certain industry, bond, stock, collectible or commodity; or to the market as a whole expecting general gains. For instance, when an investor says that they are bullish about ADA ltd., it means that he or she expects that the specific shares of ADA ltd. will rise.
When prices of equities are on the rise, we refer to the market as a bull market. Although not every stock will particularly increase, the market’s main indexes will increase. It is important to note that there is no universally accepted percentage gauge for how much a market has to rise before it qualifies as a bull market.
What it means to be bearish
A bearish investor (also known as a bear) expects the price of a certain asset to drop. Just like bullish investors, bearish investors can be bearish about a certain industry, bond, stock, collectible, or commodity; or about the market as a whole expecting general gains. For instance, when an investor says that they are bearish about ADA ltd., it means that he or she expects that the specific shares of ADA ltd. will drop. Investors who expect a market-wide dip are said to be bearish because they foresee a significant downturn.
A bullish market does not have a universally accepted percentage gauge for how much a market has to drop before it qualifies as a bullish market but this is not the case for the bearish market. When the prices of a specific security have been falling for a period of time by at least 20%, the security is considered to be bearish. This is because there may be a 10% price decline when a market is in correction.
Persevering through bullish and bearish markets
The standards of strong portfolios remain constant regardless of the current market trend. When investing, you should first have your financial goals in order. These may be vacations, retirement, buying a home, etc. Defining your goals helps you to make the best decisions during stressful periods on financial charts.
With your financial goals identified, you can then build your portfolio's asset allocation by choosing a selection of investments in your portfolio and what percentages they will hold. For instance, if you are almost retiring, your best bet would be in more secure investments like bonds and EFTs instead of the volatile individual stocks. High-risk may mean better returns, but it is important to make a decision that is low-risk if you are not willing to lose your money
In a sense, both bullish and bearish investors make financial decisions driven by fear. For the bullish investor, they have the fear of missing out, while the bearish investor is driven by the fear of losing wealth.
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