Changes and Trends— An Investor’s Perspective

Changes and Trends— An Investor’s Perspective

Before we move on to how to recognize, capitalize on and become a part of emergent market trends, we need to take some time for a brief primer on how market trends work on a broad scale, from an investor’s perspective. Obtaining investments, knowing where to expend resources and when and how to make strategic decisions all depend on a firm understanding of your market environment.

What are Primary Markets?
This is what people are referring to when they talk about Bull and Bear markets. Primary markets usually maintain their characteristics for one to three years, before shifting. It’s important as a businessman to understand what type of primary market you are working in, as well as its basic characteristics.

Bull Markets
A bull market is any group of stocks or securities in which the price is generally expected to rise. This expected upward trend is where Bull markets get their name, since bulls attack with upward thrusts of their horns. Bull markets are recognizable by a general feeling of optimism and confidence among investors. A business operating in a bull market will find it easier to obtain investments, an obvious advantage. It is important to note that this carries the danger of overvaluation and rampant speculation, which can be damaging in the long run.

Bear Markets
In bear markets, the value of securities is generally expected to decline. Again, it gets its name from the downward paw strikes with which bears attack. Operating in a bear market, there is a general feeling of pessimism among investors. Investments are difficult to obtain. Bear markets can be advantageous because the dearth of available resources encourages innovation to create new value.

Whichever environment you’re dealing with, it’s important to remember that Primary Markets, while remaining stable for longer periods of time, will eventually shift. Learn more about different types of markets only at the University Canada West, one of the best universities in Canada, offering various business and management related programs.