The terms "bear" and "bull" are often used to describe general actions and attitudes, or sentiment, either of an individual asset or the market as a whole.
Investors use the terms "bearish" or "bullish" as a quick way to describe their market sentiment regarding specific securities or financial markets. A bear market refers to a decline in prices, usually for a few months, in a single security or asset, group of securities, or the securities market as a whole.
In contrast, a bull market is when prices are rising. While the terms are relatively simple to understand, the impact either a bull or bear market can have on your portfolio and wealth is undeniable.
Both animals are known for their incredible and unpredictable strength, so the image that each evokes in regards to stock market volatility certainly rings true. Interestingly enough, the actual origins of these expressions are unclear.
Here are two of the most frequent explanations given:. According to Merriam Webster, the term "bear" came first:. Over time the name "bearskin jobber" was shortened to just "bear," and the definition was expanded to include the financial markets, which used "bear" to describe a speculator selling stock. One of the earliest references of the term "bear" used to describe a marketplace transaction came in from Richard Steele, publisher of the British literary and society journal, The Tatler.
In an essay, Steele defines a "bear" as an individual who places a real value on an imaginary object and thus is said to be "selling a bear.
In the book, Defoe writes " One of the worst bear markets in U. In contrast, when used to discuss the financial markets , the term "bull" has a much more positive connotation than "bear. This relationship to speculation seems to have at least partial origins from the gruesome blood sports of bull and bear-baiting.
These contests began in medieval times around the s and reached their height of popularity during the Elizabethan era. People would flock to the events and gamble on the outcomes, betting vast sums of money on a contest featuring a bull or a bear. It's not hard to see how this corresponds to the usage of the terms in today's stock market speculations. Shakespeare's plays make reference to battles involving bulls and bears. In Macbeth , the ill-fated title character says his enemies have tethered him to a stake but "bear-like, I must fight the course.
Merriam Webster Dictionary. Open Source Shakespeare. Investing Essentials. Your Privacy Rights. Some even let their money idle in a savings bank account. Little do they realise, their money loses value due to inflation. Rabbits buy shares for very short periods of time, ranging from a couple of weeks to intra-day buying and selling. Rabbits can make quick money but need to be lucky all the time for that to happen. How sustainable supply chains helped companies stay afloat in the pandemic.
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Bear Market Risks and Considerations. Table of Contents Expand. Bull Market vs. Gauging Market Changes. What to Do in Each Market. The Bottom Line. Key Takeaways A bull market is a market that is on the rise and where the economy is sound; while a bear market exists in an economy that is receding, where most stocks are declining in value. Although some investors can be "bearish," the majority of investors are typically "bullish. A bear market can be more dangerous to invest in, as many equities lose value and prices become volatile.
Since it is hard to time a market bottom, investors may withdraw their money from a bear market and sit on cash until the trend reverses, further sending prices lower. Perfectly timing the market is almost impossible. Article Sources. Investopedia requires writers to use primary sources to support their work.
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