Bear Market Back Into a Bull Market, Essay Example

Describe three factors that could help turn our Bear Market back into a Bull Market

A stock market is commonly described using two terms; a bear market and a bull market. A bull market occurs when the prices of stocks are rising, while a bear market refers to a situation where by the prices of stocks are falling. The stock market is usually affected by a number of economic factors. These factors determine whether a market is turning into a bull market or a bear market. These economics factors include the economic and social conditions, the strength of an economy, and the levels of employment.

When turning a market from a bear market to a bull market, it means that the economy is trying to promote an increase of the prices of stocks. This requires raising the levels of unemployment, strengthening the economy, and proving favorable social and economic conditions. This will increase the confidence of investors and will encourage them to invest in the stock market, thereby raising the prices of stocks.

Favorable economic conditions will attract investors. The government can give investors incentives to attract them to invest in the stock market, and this will create a bull market. In addition, investing in new companies and technologies will attract investors to invest in the stock market. For instance, the dot com craze of the 1990s gave investors confidence to invest in stock markets.

An increase in the levels of employment will strengthen the economy, and this will have a positive effect on stock market. Sudden unemployment or instability as a result of problems such as war can push the prices of stocks down. Therefore, in trying to turn a bear market such issues should be taken into account. These factors are important because once the rise in price is triggered; the economy being self-perpetuating will sustain the rising prices creating a bull market.