Stock Market Uncovered: Bull Market Vs. Bear Market
In stock market terminology, a market trend is putative tendency of a financial market to move in a particular direction over time. The terms most heard of regarding market trends are bear market and bull market, which describe downward and upward trends, respectively. The exact origin of the phrases are shrouded in obscurity, though their stock market connotation have been dated all the way back to 1714.
Bull Market: Bull market defines the upward movement of stocks and is associated with increasing investor confidence and increased investment in anticipation of future price increase. This trend generally begins prior to the general economy showing clear signs of recovery. There are two good ways to remember this: the ‘Running of the Bulls’ in Spain (surging stocks), and the idiom “take the bull by the horns” (investor confidence).
Bear Market: Bear market sums up the general decline in the stock market over a period of time and happens because of the transition from high investor optimism to widespread investor fear and pessimism. Quoting The Vanguard Group," "While there’s no agreed-upon definition of a bear market, one generally accepted measure is a price decline of 20% or more over at least a two-month period." A good way to remember this, at least for me, is that bears go into hibernation, and in stock market terms, so too does investor confidence.
Similarities and Differences
Similarities: Both trends take their name from the animal kingdom and are supposed to be related with their fighting styles and speed. A bull swipes its horns 'upwards' and a bear swipes its claws 'downwards'. A bull generally charges forward at great speed and a bear is slow and sluggish.
Differences: The bull market stands for the upward movement of stock market while the bear market stands for downward movement. Buying values are higher on the up days in a bull market while its up on the down days in a bear market. Also, there is a high volatility ratio in a bear trend than a bull trends. A bear market doesn't have a clear leader while a bull market has a leading stock.
Stock Market Tips and Tricks
Following are a few stock market tips and tricks you can apply during Bear and Bull trends:
During a Bull Market buy into fundamentally strong companies. Look for the following characteristics in companies:
- Earnings growth faster than the average.
- Conducting business in a strong sector.
- Operating in a growing economy.
- Company's stock approaching a technical buy signal on its bar chart and is performing better than the average stock with high relative strength.
Here is some stock advice to survive a Bear Market:
- Buy high-quality stocks when they dip in companies which pay dividends.
- Don't panic. A bear market happens as stocks go up and down.
- Don't sell indiscriminately. hold on to the high-quality stocks which will move up again later.
- Seek professional help, stock advice and online stock market tools to help you reexamine your portfolio as well as review your investment goals, your time horizon, risk tolerance, and financial circumstances.
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June 14th, 2012 - 12:40
hey great stuff, thank you for sharing this useful information.
June 13th, 2012 - 21:02
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June 13th, 2012 - 17:28
thanks for such a great post and the review, i am totally impressed!
May 28th, 2012 - 17:09
i learned a lot here. thank you so much for your personal help.
May 3rd, 2012 - 15:06
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April 29th, 2012 - 21:34
well done.
April 29th, 2012 - 06:07
it is a very nice educative article. keep it up for your hard work.
April 28th, 2012 - 01:59
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April 27th, 2012 - 12:21
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April 22nd, 2012 - 22:43
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April 19th, 2012 - 06:52
thank you for all the help.
March 28th, 2012 - 10:16
Ah! the good old bull and bear market. How many times have we heard these terms? A very good and precise explanation of these terms. Interesting take on the examples to define bull and bear market. ‘Running of the bulls’ and ‘the bear that goes into hibernation’ will help the new amateur stock traders understand the market trends with ease.
March 28th, 2012 - 04:18
Great article about the upward and downward trends of the stock market. A good understanding of the market is definitely required for trading. There are people who make money but then there are those who lose money as well. I have seen a couple of guys in office do panic selling of stocks when there was a momentary downward trend. I read a few articles after that and realized what went wrong with them. Wish they had more knowledge about surviving the temporary decline in the stock market!
March 28th, 2012 - 02:22
Don’t we hear about people making and losing money in the share market, all the time? Well explained facts about the bull and bear markets responsible for that, in this post. The trends also reflect the country’s economy & employment levels. The bull and bear markets are as you have rightly said, are terms defining stock market trends at a particular time.
March 27th, 2012 - 14:09
I checked this book out at the local barrily and found I was renewing it repeatedly. Finally decided, since it really caught my attention (and I was starting to wear the book out) that I would buy it so I could highlight all the good stuff. No mistake about it, there’s stuff in there I either don’t get or may not apply to my trading style .but it’s the good stuff that keeps me going back and digging in! It’s really a decent read!
March 27th, 2012 - 10:58
There’s also a theory about bear-and-bull fights being the origin of the terms bear market and bull market. I’m not sure about it but I’ve heard some people say it. Wonder if it’s true.
March 27th, 2012 - 10:31
There are also chickens and pigs. Chickens – those who are too afraid of losing their money. Pigs – those who are greedy and are looking for a big score in a short period of time.
March 27th, 2012 - 04:50
Bull Market and Bear Market are basically the two phrases being used by a majority of traders in stock market. It is simply a function of jargon that all traders speak in order to convey information to one another.
March 19th, 2012 - 11:02
Its sounds different and quite interesting, Bull Market vs Bear Market. The details has been provided here which differentiates both the terms. Nice information sharing.
March 27th, 2012 - 17:16
I checked this book out at the local lrbraiy and found I was renewing it repeatedly. Finally decided, since it really caught my attention (and I was starting to wear the book out) that I would buy it so I could highlight all the good stuff. No mistake about it, there’s stuff in there I either don’t get or may not apply to my trading style .but it’s the good stuff that keeps me going back and digging in! It’s really a decent read!