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Bull Market

A bull market refers to a  market condition where prices of securities, in this context stocks, are increasing or are expected to increase. The term “bull market” is most often used to refer to the stock market, but can be applied to anything that is traded, including bonds, commodities, and currencies. This term originated from the way a bull attacks its opponent – by thrusting its horns up in the air, mirroring the movement of the market prices. 

Entry into a bull market is signified by a notable increase in investor confidence and optimism, which leads to higher buying activity and decreased selling. This positive sentiment can often be the result of strong economic indicators, low unemployment rates, strong corporate profits, or even societal factors such as technological advancement. It’s important to note, however, that while bull markets often provide opportunities for investors to build wealth, they can also potentially lead to overconfidence, causing irrational exuberance that may inflate a financial bubble. 

In a bull market, investors often take a “buy and hold” strategy, anticipating further price gains. Remember, the nature of markets means that what goes up must eventually come down – All bull markets eventually become bear markets, where prices are falling.

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