How To Invest In A BULL Market: Things You Need To Know

                    Investing In A Bull Market Hello my dear friends, I hope you all are doing well. Today I will discuss how to invest in a...

                   Investing In A Bull Market

Hello my dear friends, I hope you all are doing well. Today I will discuss how to invest in a bull market and make profits from it.

I want to start this blog with Warren Buffet's quote "Be Fearful when others are Greedy & be Greedy when others are Fearful"

So let's start Investing With Ease.

One of the biggest bull market of history was started after the COVID-19 pandemic. Till now we are looking at the unprecedented high Stock market(DowJones, Nasdaq, S&P500, Nifty, BSE SENSEX, etc), companies' stocks hit all-time best performance since past years. But we have to be careful before buying any companys' share, we have to analyze rather the stock is undervalued or not. In this bull market, we saw every stock is overvalued still be can find good companies to invest in it.

(If you want to know what is bull and bear market then click on this link --->Bull&Bear)

Is it the right time to invest in the Stock market?

First, for new investors, you have to recognize that whether you are a long-term investor or a short-term investor. If you are a short-term investor like trading in F&O, Stocks, Bonds, etc., this blog is not for you. If you are looking for a long-term investment then you must read this full blog. Now first you have to see some graphs

If you look closely at the graph of both indexes, you can check out that there are lots of highs and lows, same with the companies stocks, you can see many highs and lows, but the key thing is you have to stay invested. If you check the 2000 dot com crash, 2008 crash then you might think that just let out of this investment but after that, you can check immense returns from stocks and other investment tools. So look for a long horizon and you will get benefits from both bull and bear markets.

Just you have to remind some key things,

1) Stick To Quality:

I saw a trend to buy the penny stocks in bull markets because at that point in time every stock giving too much higher returns and everyone want to catch that train and make some profits, for this greediness they invest in some stocks or instruments that have no fundamental values and just getting higher for the trend and hype. For this reason, most of the investors face huge losses. So stick to the fundamentally strong companies and investment options in the bull market. Because we never know when the market will crash and at that point of time will the company survive or not(Just take the example of Amazon).

Fundamentally Strong Companies: Is the company profit-making or not, has any good future prospects or not, P&L statement good or bad. Also, you have to check some ratios like ROE, ROCE, Debt to Equity to understand companies' growth and other factors, I will discuss these fundamentals in another blog so stay tuned.

2) Book Your Profits:

In my IPO blog, I already gave you this tip but that was in another way. Here is another POV. If you are already in a bull market and already got great returns then you can book some profits from it and when the market be slightly down then you can re-enter. I will suggest you don't sell all of your holdings, only sell if you really think the profits are enough for you.

⦿Example: If you bought a stock at ₹100 and now its price is ₹150 and it growing more then you should book some profits from it by selling some of its portion, not all stocks, and wait if it goes up then you can book more profits.

After that when the bear market will come then you can re-enter that stock and buy that at a lower price. It means by booking your profits you are giving space to re-enter the bear market with more cash in hand.

3) SIP(Systematic Investment Plan):

Currently, this is the best tool we have to grow our money systematically, and it is more important in the bull market. Because every month irrespective of the price you are buying stocks or assets.

Just like if you bought some stocks in 2007 at a higher price level and when the market crashes in 2008 then you would also buy the same stock at a lower price and via that, you can average your buying price which is quite lower than 2007 buying price.

⦿Example: Suppose you bought 1 stock before the COVID-19 crash at ₹1600 and after the crash, you bought the same stock at ₹800 then your average buying price would be ₹1200 of 1 stock. But if someone invested a lump sum before the COVID-19 crash then you had to pay ₹1600 for one stock. So it is the best tool because no one knows then will the price go up or down.

4) Keep Tracking the Market:

We never know that when will the market crash or correct because every market cycle has an end, and the stock prices would not grow constantly. And if any stock does not perform with other stocks in the bull market then note that why it is happening and stay alert with that stock.

Conclusion: 

1> Stick to SIP. ★

2> Stick to Quality. ★

3> Book your Profits time by time in the bull market. ✦

4> Buy the Dip. ✪

Stay invested, stay happy. Follow this website for more investing strategies. In an upcoming blog, I will discuss what is best for you, Stocks or Mutual Fund. Also if you have any suggestions or queries then please let me know in the comment section. Till then bye-bye😃😃.

Editor:  Sk Elaf Ahmed.