I'm trying to wrap my head around all this investing lingo so a little clarity would be appreciated...
Although the terminology used by stock brokers and Wall Street people may seem complicated with jargon, but the easiest to explain and understand is the terms of bull and bear. First off the Bull market refers to investors who believe that the market or individual stocks will rise in value. As for the Bear market, it refers to investors that believe just the opposite, that the market or individual stocks will drop in value. These terms are used when the market or individual stocks are on a rise or fall of at least 20%.
Some interesting information about bear and bull markets I have ran across over the years is that the bear market term has been dated back to as early as the 17th century where it derived from a saying “to sell the bears skin before one has caught the bear.” The bull market derives from the bull itself in that it is an aggressive and intrepid animal that is courageous on his charge ahead. Just as the two terms are interpreted in the stock market today.
A bull market is a rising market and a bear market is a declining one. If a market rises by 20% or more, it's said to have entered a bull phase. A decline by 20% or more indicates a bear phase.
There are secular bull & bear markets and cyclical bull & bear markets. A secular market refers to a long term trend, while a cyclical one is more short-to-intermediate term. So, you could have a cyclical bull market within a secular bear market.
Indeed, we've been in a secular bear market in the US for 12 years, but a cyclical bull market since March of 2009.
Hi Marty, A Bull Market is characterized by " optimism, investor confidence and an expectation that strong results will continue" a Bear Market is the opposite. Some prefer to define a bull or Bear market as a 20% rise or fall in equity markets. The use of " Bull" and "Bear" to describe markets comes from the way animals attack their opponents. Regardless of the lingo, no one really knows which one is coming next - Bull or Bear - so it should have no influence on your financial planning and investment strategy. Best of Luck! Evan
When I first encountered these terms in college, I liked the idea of a bull marketing being like a bull: charging forward and tearing through any and all resistence. A bull market in stocks usually means stocks are charging forward, for a period of time. A bear market is more like a hybernating bear that lays down and sleeps. When a bear hibernates, their systems (breathing, etc) drop off rather substantially so a bear market tends to drop off/decline quite a bit. But as Marty clearly shows, there are different breeds of bulls and bears and the two can be interbred as various times within pieces of the stock market!