Bulls and Bears


In the stock market, the bulls and bears are in a constant struggle. I think it’s strange we associate one of our most complex financial markets with animals. Maybe its a method of making a intimidating topic appeal to the average trader. Whatever the reason, you will hear alot about them in your trading.

The Bulls

In a bull market, everything is great. The economy is great. Unemployment is low. The gross domestic product (GDP) is growing. Stocks are rising. Picking stocks for investments during a bull market is fairly easy as everything is going up. However, they cannot last forever, especially when stocks become overvalued. A person with an optimistic outlook is a “bull” or, has a “bullish outlook”.

The Bears

bulls and bears
In a bear market, everything is bad. This usually happens during a recession, when stock prices start falling. It’s  quite hard picking stocks for investing during a bear market. However, there is a method to still make money during the hard times referred to as ‘short selling’.  Some investors are happy to wait out the bear market, until they anticipate the start of a new bull market. A person with a pessimistic outlook is a “bear”, or has a “bearish outlook”.

The best way to remember which one is the bear, and which one is the bull, is to think of a bull throwing up a matador with its horns, and a bear beating the ground.

Chickens

Chickens aren’t as well known as bulls and bears. They are afraid to lose everything. Remember not to invest using money you can’t afford to lose.

Pigs

Pigs are high-risk investors. They look for big profits over a short amount of time. They buy on hot tips, get impatient, greedy, become emotional, and invest before putting any time into research.

There are many investment styles and strategies. The worst loser is the pig in the game. Remember to do your research before you enter the market. And invest only what you can afford to lose.

"Bulls make money, bears make money, but pigs just get slaughtered!"