.First, let us understand what do you mean by a bull market? A bull market is a financial market with rising asset prices that are fueled by investors’ confidence and expectations. But the bull markets are partly based on actual investment performance as well as on investor’s psychology. It is said that the bull market gets its name from the way a bull thrusts its horns upward. Therefore, when investors are optimistic about investment performance, it is called “bullish.”
The bull market in stocks is likely to extend into 2018 and it is alive and lashing out. However, the bull’s final charge would not be pretty, according to various technical analysts. It is noted that the stocks are likely to face huge volatility. As they stage one last rally before year-end and then stumble badly, falling at least 25% in 2018. In the upcoming few months, investors must expect a market drop of up to 10 percent. Before the bull’s last-gasp rally and the final plunge.
It would be not wrong to say that the great bull market will end sometime in 2018. It is believed by the analysts that the rates will get lower. After experiencing negative real, inflation-adjusted, interest rates for eight of the last nine years.
However, it is observed that the stock market just would not go down, in spite of geopolitical concerns, stretched valuations and an unpredictable president. Everything has logic; similarly, there is logic to the behavior of the stock market. However, things can turn quickly, and when they do, the decline could be severe in the market. It was noticed that the big winner so far this year has been huge, fast-growing companies like Amazon.com, Facebook, Apple and Google parent Alphabet. Therefore, while the S&P 500 has risen 11% so far this year, the S&P 500 Growth Index, which is concentrated in companies with strong earnings and revenue growth, has risen 17%. On the contrary, the S&P 500 Value Index that focuses on stocks with lower price-earnings, price-to-sales and price-to-book ratios is up by 4%.
According to the experts, the gains for these stocks make sense for two reasons. One is that the investors tend to favor fast-growing companies in the latter stages of an economic expansion. That is where the U.S. economy is right now after eight years of growth. The genuine reason for it is harder to generate growth late in the cycle. After the easy gains have been made, putting a premium on companies that still exhibit strong profit gains.
Another reason for the gains for these stocks is that many of the big companies. Leading the really do a large portion of their business abroad, where many countries are experiencing economic upswings.