What it is
In financial markets, a rally is what happens when investment prices go up over a sustained period. This could refer to an increase in the prices of individual assets like stocks or bonds, or the collective value of entire indices and markets.
What it means for you
A “rally” is a term you’ll hear and read about a lot when following investing or economic news. It’s often seen as a good thing, since investors might make a profit during a rally if they time their transactions right.
Put simply, a rally can happen when there is high demand for investments. If there are more people who want to buy an asset than those who are willing to sell, the price of that asset goes up.
There are different reasons for demand to rise significantly. For example, when there’s good news benefiting certain public companies like impressive earnings reports, investors may be encouraged to buy their stocks and other related assets.
Optimism can also be driven by larger economic events that impact entire industries. Some examples are changes in taxes or new laws that are expected to help businesses grow.
Take note that it can be hard to predict when a rally would start, how long it will last, or how much prices will increase.
Remember to consider your strategy, do your research, and think long-term before reacting to price changes.
