A-Z of Investing: Bulls and the Bears

These are two terms that you cannot avoid hearing if you are discussing the stock market. For those who are not sure what they mean, it can get a bit difficult following the discussion. So what exactly do these terms mean?

Consider the Bull. It's an animal that's a symbol of vigour and energy. It charges at its opponent with its horn pointed up in the air. The Bear on the other hand comes across as laid-back and lazy in its approach. Now, if we co-relate these images to stock market movements we can say that any upward, positive movement is "bullish" while any movement that is slow, lethargic can be considered "bearish".

A person who is upbeat about the stock market is therefore also called a "bull" while those who are pessimistic about the market is called a "bear".

But remember that a bull or a bear market is not a short term event. Nor can it be attributed to a particular stock. Usually, the stock market is said to be going through a "bull phase" if it picks up by at least 20% across most sectors. Similarly, the markets are said to be going through a "bear phase" when the markets are down by 20% or more.

During a Bull Market - most people are planning to buy stocks and there is a general air of positivity around the whole economy. As you'd have guessed by now, during a Bear market, the opposite happens. People are mostly trying to sell of their shares, the overall economy slows down.

So that's more or less what anyone means by Bulls and Bears.