Stock Market 101: Bear Market Vs Bull Market

​What does a bull or bear mean?

The Beasts of the Finance World

What are Bear and Bull Markets?

Where did the term "bull" and "bear" originate from when describing market movements? Both animals are described to have incredible yet unpredictable strength, which also describe the stock market in terms of volatility.

Bear Market
​
A bear slashes their claws downwards, and describes a market that is declining. A market is considered a true bear when stock prices fall at 20% or more, which results in low investor confidence.

• Occurs when the economy is not doing well.
• Pessimistic attitude.
• The economy is not sustainable.
• Weak market indicators.
• Insufficient disposable income.
• Low liquidity.
• International investments are discouraged.

Bull Market
​
A bull thrusts their horns upwards, and describes a market where stock prices are consistently rising and the economy is expanding.

• Occurs when the economy is doing well.
• Optimistic attitude.
• Economy is sustainable.
• Strong market indicators.
• Sufficient disposable income.
• High liquidity.
• International investments are encouraged.

​The two animals are also used to describe market sentiment. If investors expect an upward trend, then the sentiment is said to be "Bullish". On the other hand, if investors expect and downward price movement, then the sentiment is said to be "Bearish".