How to Invest in a Bull Market
Take advantage of a rampaging bull market with these financial tips.
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Learn about the stock market with these tutorials.
You Will Need
- Mutual funds
- Stocks
- The currency of emerging countries
Steps
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Step 1
Buy mutual funds
Buy mutual funds, which tend to go up in a bull market because the funds are all buying the same stocks.
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Step 2
Sell small-cap stocks
Sell small-cap stocks, also known as emerging-growth stocks, which don't usually see as much growth in a bull market because they are not owned by mutual funds.
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Step 3
Buy emerging-market stocks
Buy stocks sold in emerging markets because a strong world economy boosts their value.
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Step 4
Sell your bonds
Consider selling safe investments like bonds and dividend-paying stocks so you can take advantage of the higher returns that can be collected during a bull market.
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Don't sell your safe investments if you are nearing retirement age.
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Step 5
Buy "on margin"
Consider buying stocks "on margin" – which means buying them with borrowed money. Stocks are more likely to rise during a bull market, making you enough money to justify the risk.
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Step 6
Trade stock options
Buy stock options, which are easy to profit from in the volatile atmosphere of a bull market.
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Step 7
Don't buy IPOs
Don't buy initial public offerings, also known as IPOs. In a bull market, there's such a demand for stock that many mediocre companies go public, only to go bust later.
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Step 8
Buy the currencies of emerging countries
Buy the currencies of emerging economies, which tend to thrive in good global economies thanks to their low costs of manufacturing.
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According to the Stock Trader's Almanac, the longest bull market on record ran from October 11, 1990 to July 17, 1998, gaining a total of 295 percent in value.
