What Creates A Bull Market?

What Creates A Bull Market?

1 Answer

  1. Hi Janny, there are three major causes behind the creation of bull market. The first cause is top-line revenue which implies that this should increase for companies as fast as the economy grows, as measured by nominal gross domestic product, by using the output of goods and services using current prices. TLR generally mirrors the demand for goods and services from consumers.
    The second major cause is profit. This refers to how much top revenue has been generated profit for a company. While this appears to be good for the economy and consumers when companies can generate more profit from the same revenue dollar, but in truth, it’s not. This profit comes at the expense of jobs, salary reductions, and investments in capital.
    The last one is P/E ratio. The price to earnings ratio is the ratio of a stock price for each dollar of earnings per share. Investors tend to monitor the P/E for their investments as earnings begin to drop, the P/E rises, causing investors to begin selling their holdings.

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