Who Controls the Stock Market?


Anyone who has been following the stock exchange or watching TV news is probably familiar with the conditions Bull Market and Bear Market. What do they mean?

A bull market is defined by steadily rising stock news sentiment costs. The market is flourishing and companies are generally earning a profit. Most investors feel this tendency will continue for a while. By contrast a bear market is one where prices are dropping. The market is probably at a decrease and several companies are experiencing problems. Now that the investors are pessimistic about the future sustainability of the stock market. Since investors’ attitudes tend to drive their willingness to purchase or sell these tendencies normally perpetuate themselves until significant external events intervene to cause a reversal of view.

In a bull market the investor hopes to purchase early and maintain the stock until it has reached it’s high. Obviously predicting the low and high is hopeless. Because most investors are”bullish” that they make more money in the climbing bull market. They’re ready to invest more money as the stock is rising and realize more profit.

Investing in a bear market incurs the best chance of losses because the tendency in downward and there’s absolutely no end in sight. An investment strategy in this case might be short sale. Short selling is selling a stock that you don’t own. It is possible to make arrangements with your broker to do this. You may in effect be borrowing shares from the broker to market in the hope of buying them back later when the price has dropped. You will gain from the difference in the two prices. Another strategy to get a bear market would be purchasing defensive stocks. These are stocks such as utility businesses which aren’t affected by the industry downturn or companies that sell their products during all economic conditions.

Traditionally investors bought and sold inventory through large brokerage houses. They made a telephone call to their agent who relayed their order to the market floor. These brokers also offered their services as stock advisors to folks who knew very little about the market. These people today relied on their broker to guide them paid a hefty cost in commissions and fees as a outcome. The advent of the Internet has led to a new category of brokerage houses. These companies provide online accounts where you might log in and purchase and sell stocks from anyplace you can find an Internet connection. They usually don’t offer any market information and only offer order execution. The Internet investor can get some excellent deals as the members of this new breed of digital brokerage houses compete for your business!