The Bear Market. The Bull Market. The Bear and the Bull. We hear these phrases often. But what do they actually mean? And what do animals have to do with investments? Here's the skinny on what it all means!
When someone describes the market as a Bull Market, this means that the stock market is on the rise. This means that prices are going up, there are a great number of stock shares being traded, and a high number of companies entering the stock markets. Because of these characteristics, investors are showing confidence and showing they are willing to take risks.
In technical terms, a bull market occurs when there is a rise n the market's value of at least 20%.
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What is described as a Bear Market is a stock market that is characterized by dropping prices, lower business profits, higher unemployment, less confidence from investors, and therefore, less risks being taken by investors.
A Bear Market occurs when markets fall more than 20%.
So...why did they pick the bear and the bull to describe these occurrences??
When in battle and fighting, a bull will thrust its horns in an upward position. Whereas, a bear will swipe its paw down.
and Bear Markets are sliding downward.
Financial Sisterhood TM, 2016