By: Alvonta Primm (Brotha P)
Facebook: Alvonta Primm
Bull market. Bear market. These may have been among the terms you have been hearing lately when tuning in to your favorite (or least favorite) 24-hour news station as they report on the current hot and cold state of the stock market. You may have no idea what these terms mean or what their relevance is to investing. Although the stock market (and its terms) can be rather complicated, it’s not as hard as one may think. A bull market means that there is optimism that prices will raise and are currently rising as well as a particular market showing signs of promise. In a bull market, investors are feeling quite confident. In a bear market however, there is pessimism due to prices dropping. When a bear market experiences an economic downturn of 20% or more, that is said to be the time to panic because a recession is normally looming nearby.
You may ask how these types of markets received their names. The characteristics of the markets are based on the fighting styles of the animals that represent them. A bull attacks its opponent with its horns pointed upward (stock prices are rising) while a bear’s paws are faced downwards when the attack (stock prices are falling). Hopefully, understanding financial such as these makes it a bit easier to follow the stock market. If you’re from Chicago this should be that much easier to follow seeing that these market are named after two of your beloved sports franchises; the Bulls and the Bears. After the Bulls first NBA title, they went on to become a dynasty winning five more titles during the 90s. The Bears however, haven’t been as successful since winning the Super Bowl in “85” despite numerous playoff appearances and a return to the Super Bowl in 2007. In you need another example of the bear market, just think of the Cubs prior to ending their title drought last year.
A special shout out to my beautiful people in Chicago.