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Pigs are killed while bulls and bears profit from their
slaughter. That is a proverb from the investing world, so why all the
"animal talk"? How do bull and bear markets differ?Investors allude to the primary feature of financial markets
and the beliefs that investors have about them using animal names. The two most
well-known examples of this are probably bull and bear markets. Hawks versus
doves is another illustration. What distinguishes a bull investor from a bear
investor? Investors who have a bullish outlook on the market and anticipate
price increases are referred to as "bulls." An investor who is
pessimistic about the market's future direction and anticipates falling prices
is referred to as a "bear." These expressions can also be used to
describe the sentiment or attitude of the market. High levels of optimism and
buying activity are indicative of a bullish market, whereas pessimism and
selling activity predominate in a negative one.
Bear vs
bull market explained
Bulls and bears have been used in financial jargon since the
17th century. The term "bull" was first used to characterise the
stock market on the London Stock Exchange (LSE) in 1769, according to bull vs
bear market history. Eight years later, in 1787, also on the LSE, the word
"bear" was first used.The way these creatures attack is said to be where the terms
originated. A bear approaches from the side and swipes its claws down, whereas
a bull assaults head-on by raising its horns into the air. These behaviours
resemble how market values fluctuate. In a bull market, prices rise, and in a
bear market, prices decline. Equity market benchmark indexes often spend more
time rising than dropping, in terms of bulls vs. bearish equities. This is
related to the psychological aspect of trading and loss aversion, where traders
often panic and sell off rapidly following a market drop.Prices can also simply go sideways, which means they can
repeatedly remain at the same level. Due to their higher volatility, other markets including
foreign exchange and commodities futures frequently enter and exit bull and
bear markets.
What is
a bull market? Key characteristics
Bull markets are typically linked to favourable economic conditions and a high level of investor confidence. A bull market has the following crucial traits: rising prices. This is evident in the market, where share prices and the value of other securities are rising. A bull market, according to some investors, is one that has increased by more than 20% from its 52-week low. This indicates an increase in investor confidence as the market is now 20% higher than it was a year ago at its lowest point. This indicates that more people are putting money into the market with the expectation of earning a profit. In general, the economy is doing well. With low unemployment and good growth, this indicates that the economy as a whole is functioning well. the bull market for the
Dow Jones Industrial Average (DIJA), a benchmark US index, happens when the
price is on an upward trend.