Financial markets or financial exchanges are places where bonds, options, stocks, other securities, commodities, and other financial instruments are bought and sold.
Laymen, financial advisors, and investors are generally interested in determining the future price of the investments they hold that are traded on financial markets or exchanges – other assets, like real estate, isn’t sold on an exchange and doesn’t have a “stock price,” given by a complex financial formula.
Let’s kick it with Charlie
Assume Charlie is an investor. He has $100 invested in shares of Apple, Walmart, Berkshire Hathaway, and The Home Depot – $100 stowed away in each of the four securities. If Charlie believes the price of all four of those securities will increase – in this example, those four securities are quite literally the entirety of the financial market – then he could say he feels “bullish” about the upcoming performance of the financial market. Charlie could also say he expects to see a “bull market” soon.
On the other hand, if Charlie felt the price of all four of those securities were to fall, he could express such a sentiment as saying he expects a “bear market” or that he feels “bearish” about the financial market.
The term “bull market” is used quite frequently in finance
Every individual security, index of a certain industries’ shares, and financial instrument will both gain and shed price changes throughout an hour, day, week, month, year, and lifetime. People who invest unarguably have their hard-earned money tucked away in financial instruments; they weren’t simply blessed by the gods in the form of crates being parachuted down to Earth that are chock-full of money.
Investors stash their money away in appreciable assets because they want to earn more throughout their lives. Almost all investors will maintain their investment portfolios well through retirement. Rather than living off wages during one’s golden years, lifelong investors plan on using those investments to live comfortably.
As one might imagine, investors are inherently interested in predicting bear and bull markets. Every reasonable investor who exercises due diligence in making sure their investments are placed in appropriate stores of value must regularly keep up with the performance of financial markets in case any securities rapidly drop in value.