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Definition of 'Rally'

A rally is a sudden, sharp increase in the price of a stock or other financial asset. It can also refer to a period of time during which prices are rising.

Rallies can be caused by a variety of factors, such as positive news about a company, an increase in demand for a particular asset, or a change in investor sentiment.

Rallies can be beneficial for investors who own stocks or other assets that are rising in value. However, they can also be dangerous for investors who are not prepared for the volatility that can accompany a rally.

It is important to remember that rallies are not always sustainable. In fact, they often lead to a correction, which is a period of time during which prices fall.

As such, it is important to be cautious when investing during a rally. Investors should only invest in assets that they understand and that they are comfortable with the risk of losing.

Additionally, investors should have a plan in place for how they will react if the market turns down. This could include selling some of their assets or taking profits.

By understanding the risks and rewards of investing during a rally, investors can make informed decisions about how to allocate their capital.

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