The Birth of Bull and Bear Markets as Financial Terms
The terms, "Bull," and "Bear" for the state of the market are inspired by the typical way in which these two animals attack in real life scenarios. The bull is generalized to attack by forcing its horns up into the air, symbolizing the upward trend of a bull market. In contrast, the bear is generalized to swing its paws down upon its prey; thus serving as a symbol for downward trends.
Stock market conditions are defined commonly either by the term, "Bull," or "Bear." Although they are essential basics to understanding the state of the market, it requires significant knowledge to truly understand the market valuation. Since the market strength has an imperative impact on the performance …show more content…
During bull market performance, people will be more likely to participate as they perceive a chance of profit. In the alternate scenario of the bear market, market outlook is viewed negatively, and investors will be likely to remove investments from equities until a positive move occurs. The depreciating stock market participation has the cascading effect of negatively affecting overall market performance. Securities: Supply and Demand - Strong demand and weak supply exists for securities under bull market conditions. This causes the price of shares to appreciate. The opposite occurs under a bear market, as demand is lower than supply, which leads to depreciation in the value of share prices. Altered Economic Activity - Bear markets are commonly associated with depressed economies because customers are not spending enough to support growth of businesses. Profit declines lead to decreased stock valuation. When in a bull market environment, disposable income is more common and customers are more likely to contribute greater business revenue, which cascades into increased stock …show more content…
It is important to keep in mind that judging a bear or bull market will depend upon what form of time period is being reviewed. Any small or sudden change in value may be judged as a short-term trend or market value correction.
The market is not always, however, in a bull or bear state. It can reside in between both categories, in a state of stagnation. Such a trend could be identified with inconsistent upward and downward values as the stock approaches actual value. Gains or losses during stagnation will often be cancelled out until the stock enters bull or bear
The terms, "Bull," and "Bear" for the state of the market are inspired by the typical way in which these two animals attack in real life scenarios. The bull is generalized to attack by forcing its horns up into the air, symbolizing the upward trend of a bull market. In contrast, the bear is generalized to swing its paws down upon its prey; thus serving as a symbol for downward trends.
Stock market conditions are defined commonly either by the term, "Bull," or "Bear." Although they are essential basics to understanding the state of the market, it requires significant knowledge to truly understand the market valuation. Since the market strength has an imperative impact on the performance …show more content…
During bull market performance, people will be more likely to participate as they perceive a chance of profit. In the alternate scenario of the bear market, market outlook is viewed negatively, and investors will be likely to remove investments from equities until a positive move occurs. The depreciating stock market participation has the cascading effect of negatively affecting overall market performance. Securities: Supply and Demand - Strong demand and weak supply exists for securities under bull market conditions. This causes the price of shares to appreciate. The opposite occurs under a bear market, as demand is lower than supply, which leads to depreciation in the value of share prices. Altered Economic Activity - Bear markets are commonly associated with depressed economies because customers are not spending enough to support growth of businesses. Profit declines lead to decreased stock valuation. When in a bull market environment, disposable income is more common and customers are more likely to contribute greater business revenue, which cascades into increased stock …show more content…
It is important to keep in mind that judging a bear or bull market will depend upon what form of time period is being reviewed. Any small or sudden change in value may be judged as a short-term trend or market value correction.
The market is not always, however, in a bull or bear state. It can reside in between both categories, in a state of stagnation. Such a trend could be identified with inconsistent upward and downward values as the stock approaches actual value. Gains or losses during stagnation will often be cancelled out until the stock enters bull or bear