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What is a Bull/Bear market? Investing 101.

What is a Bull Market?

A Bull market is trading talk for the market being in a upward trend.

What is a Bear Market?

A Bear market is trading talk for the market being in a down trend.

Why are the terms Bear and Bull used?

The terms “bear” and “bull” are thought to derive from the way in which each animal attacks its opponents. A bear will swipe down, while a bull will thrust its horns up into the air.

Why do markets act like this?

It's very rare that a market will stagnate. Markets almost always move in up or down trends. The average investor usually follows the market trend. If they see a coin or stock rising in value they jump in. If they see that others are selling they sell as well.

Summary

Bear and bull markets come and go in cycles. As an investor you need to be prepared for both. During a bull market it is important to not get greedy and over invest. During a bear market it is best to think hard before selling - will your investment be worth more in a few years? Sometimes it's best to weather the storm.

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