Okay, so what in the world are they talking about when they call the stock market a bull or a bear? Bulls and bears?
You’ll hear this a lot, so you should know what it means.
A bull market is a stock market going up in value, and not just for the day, but over an extended period of time – months or even years. You might hear that someone is “bullish” on the market or “bullish” on a particular investment. It just means they are optimistic it will go up.
A bear market is just the opposite. It is a stock market that is going down in value. Again, just because the market goes down today doesn’t mean we have a bear market. If the market has been going down over the past several months or years, we could call it a bear market. You may also hear that an investor is “bearish” on the market or on a particular investment. This just means they are pessimistic and think the market or investment will go down in value.
Here’s a quick trick to help you remember these. Think about how each of these animals strike their prey. A bull thrusts its horns upward and a bear uses its paws to strike down. Get it? Bull horn up and bear claw down?
Pop quiz. If you are bullish on Amazon stock, do you buy it or sell it?
If you are bullish, you think the stock will go up, so you’d want to buy it now.
If you are bearish on Amazon stock, do you buy it or sell it?
If you are bearish, you think the stock will go down, so you’d want to sell it now.
The proceeding blog post is an excerpt from Get Money Smart: Simple Lessons to Kickstart Your Financial Confidence & Grow Your Wealth, available now on Amazon.