Buyer's Market

A buyer's market is any market in which there are more sellers than there are buyers. The laws of supply and demand typically cause prices to drop in a buyer's market. A buyer's market can be likened to buying stock at sale prices. A buyer's market can refer to the stock market as a whole, to a sector of the market, or to an individual stock. During a buyer's market prices typically fall until enough buyers come back into the market to begin driving prices back up. The opposite of a buyer's market is a seller's market. In a seller's market there are more buyers than sellers, driving prices up. A buyer's market can be triggered by an overall drop in stock prices, by negative news, or by recognition that prices are too high from a fundamental standpoint.