Finance

Bull vs Bear

Bull vs Bear

The term “bull” and “bear” represents the market conditions. They describe how the stock market is performing. The bull market represents the continuous rise in the price of security or asset. The bear market represents the fall in prices of the underlying security or asset. As an investor, it is important to understand the market conditions. As a wrong decision will impact the portfolio. Over a long period of time, the market has displayed positive returns. This determines that the majority of investors were bullish.

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What is a Bull vs Bear Market:

  • The term bull vs bear represents the market condition where a clash between the stock buyer and seller is seen. In bull vs bear, the stock market is highly volatile. The word bull vs bear comes from the way these animals attack their opponent. The bull attacks its opponent by thrusting its horn in the air. This represents investors buying stocks and the prices continuously increase (investors being bullish).
  • The bear attacks its opponent by swiping its paws downward. This represents the short-sellers. Those who sell the stock and the prices of the underlying asset keep on dropping. This shows us investors are bearish towards the market.
  • The bulls thrust and bear swipe are metaphors for the movement of the stock market. In a bull vs bear fight. The market becomes extremely volatile and the prices keep on fluctuating. This type of action is known to be a bull vs bear market.
  • In simple words, if the market is in an uptrend the buyers are winning. This represents the bull market. If the market is downwards the sellers are gaining. This represents the bear market.

Differences between a Bull and a Bear Market:

Investors identify the market’s behavior, psychology. Investors determine the flow of the market. In simple words, investors impact the behavior of the stock market. An increase in the country’s gross domestic product (GDP), rise in stock, and an increase in the country’s employment rate are the key indicators of a bull market. A high rate of unemployment, a fall in the stock price, and a decrease in the country’s GDP indicate a bear market.

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Bottom Line:

The bull vs bear market is a market condition. The bull represents the continuous price rise. It displays the economic condition of the country. The bear represents a fall in price and indicates a decline in the country’s economic conditions. Investors should buy stocks at the lowest price possible so when the price rises, they will be in profit. An investor should be aware of the market trends before making an investment.

 

Author – Divyashri Kadam

About The Author – Divyashri is a Bachelor’s Degree Holder in Accounting and Finance. Also, a Certified Financial Modeling and Valuation Analyst (FMVA). She is enthusiastic to learn more about financial markets, financial analysis, and anything relating to stocks.

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