Buzz
I like to think of myself as someone with a decent grasp on investing, but whenever I hear 'bear market' or 'bull market,' I find myself needing a quick reminder of what they actually mean. (Is it the bear market where stocks are falling, or is that the bull market?)
So, if you were following the news this morning and saw the announcement that we're entering our first bear market since 2009, and wondered whether that's a good or bad sign, here are three easy tricks to help you differentiate between the bulls and the bears.
Bulls attack upwards while bears strike downward.
As Ian Salisbury explains at Money.com, bulls fight by charging upward while bears strike by swiping downward:
In the world of stock market terminology, there are two types of markets: bull and bear. The names are believed to have emerged from the idea that a bull attacks by thrusting its horns upward, while a bear fights by swiping downward with its claws.
I’ve never personally participated in either a bull or bear fight, so I can’t confirm the accuracy of this theory.
Bulls lift their opponents into the air, whereas bears slam them into the ground.
For those who prefer their metaphors with a bit more impact, here’s one from Alex Planes at The Motley Fool:
While a bull may be known for tossing its enemies into the air, a bear prefers to slam its foes to the ground.
Once again, I’ve never directly witnessed this bull/bear behavior firsthand—but I’m certainly familiar with the concept of 'bears knocking foes into the dirt,' thanks to that Leonardo DiCaprio film.
Bulls charge ahead, while bears retreat into hibernation.
For a less intense mental shortcut, Melanie Pinola shared this analogy with Mytour readers back in 2015:
In a bull market, everything is progressing forward: investors are eager to make purchases, more companies are entering the market, and overall investments in stocks are increasing (technically, a bull market means the market has risen by at least 20%). In contrast, during a bear market, investors pull back (just like bears hibernating). Prices stagnate and drop, and people become more cautious, waiting before deciding whether to invest further in stocks or bonds.
I think bears might also charge forward (after all, I’ve seen The Revenant), but since bulls definitely don’t hibernate, this could work too, right?
If you’ve got other ideas on how to easily remember which market is the bear market and which one is the bull market, let us know—because, honestly, none of us want to keep checking our phones every time the market shifts.
