The world of banking, stock trading, and high finance is a unique one indeed. For someone who is just starting out, figuring out rapidly-changing market trends can be an overwhelming challenge. But understanding what Wall Street means, and knowing what role Wall Street can serve in your financial life, can be very helpful. Also, before you read any further, make sure you check out wallstreet mastermind linkedin.
Here are some tips for understanding and navigating Wall Street market trends.
Bear Markets Vs. Bull Markets: Know Your Terms
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One of the two major terms that denote market trends is the Bear Market. Bear markets typically indicate a fall in prices and stock values, giving Wall Street pros a reason to be negative. Basically, if something trends “downward”, it indicates a bear market.
On the other side of that spectrum, you’ll find the bull market. This unsurprisingly stands for the opposite of bear markets, meaning that trends are rising, prices are going up, and people predict stock values to continue growing. Bull markets give financial advisors and stock traders plenty of reasons for optimism.
You will see both bear and bull markets being referred to on the stock market, but you may hear these terms in other financial markets as well, including:
- Trading bonds
- Real estate
- Currency rates
Understanding these two markets is everything you need to know about the basics of navigating market trends on Wall Street. Bull markets typically last much longer than bear markets, although Wall Street, in general, is in constant fluctuation between the two. Nothing can survive in this world without a balance of yin and yang.
What to Do During These Trends
If Wall Street is in the middle of a bull market, you want to take advantage of it while it lasts. This is your time to buy, but it’s also your time to hold. Start early, buying stocks or anything else you’d like to trade while it is still rising in value. Hold it until it reaches its predicted peak, and then sell it for a profit.
You can also wait to rebuy until the trend reaches a retracement, which Investopedia defines as a brief period of time where the rising stocks take a temporary dip. Imagine it like a line graph, with small peaks and valleys over an overall upward trend. During retracement periods, you’ll want to buy up all the stock you want to save and sell it when the line graph reaches a peak again.
It’s easier to understand market trends and get started in the Wall Street game when the market is fairly calm. Natural ups and downs always occur, but that is just part of the cycle. However, there are moments where the ups and downs become more tumultuous. In an increasingly volatile market, how can you predict when the best time to buy, sell, or hold is?
Most Wall Street veterans are inclined to agree that as long as your long-term financial plan is solid, and your investments are good, then it’s never a bad time to buy. If you can keep a close eye on your goals and you know what kind of investments you need to meet those goals, then you can trust your instincts.
As always, if you are unsure of the current market situation, or you don’t know what move to make next, you can consult with Wall Street professionals and financial advisors who would be available to assist you.