The Crypto market has the same fluctuations as the stock market, so the terms in securities are also applied in this Crypto market. We often hear the terms bear market and bull market to describe the movements of the stock market. So what is it?
Wall Street Bull: Charging Bull
Before learning these two terms, please enjoy a very unique and famous sculpture: Charing Bull, known as the Wall Street Bull or Bowling Green Bull. It is a bronze sculpture located in Bowling Green Park, near Wall Street, New York.
This work sculpts a bull, a symbol of optimism and financial prosperity. The bull’s head was slightly lowered, the muscles twisted to one side, the nostrils opened with sharp horns as if ready for a thunderous butt. It was an angry and dangerous beast.
Thanks to this work by Arturo Di Modica, Bowling Green Park has become a popular tourist destination that attracts thousands of people every day, as well as being the most iconic image of New York.
Why is the image of a bull with dangerous horns a symbol of optimism and financial prosperity?
Let’s find out together.
My Investment Blog will help you know exactly these terms, their expressions and how they will affect you when investing in the stock market.
What is a bull market?
A bull market is a term used to describe the continuous uptrend in prices of stocks in the stock market. During these times, investors have confidence that the uptrend will continue in the long term and they will be excited to buy stocks to wait to sell them at even higher prices.
If that really happens in the long run, the economy will benefit too, grow strong and the unemployment rate will fall but inflation will also increase.
What is a bear market?
In contrast to a bull market, a bear market is a manifestation of stocks that are constantly falling in price on the stock market. At this time, investors’ fear and pessimism spread to the whole market and they will sell off their holdings. The downward spiral of stock prices is even stronger.
The stock market is likely to crash if stock prices continue to fall over the long term. The Great Depression of 1929 (also known as Black Tuesday or (The Eve of World War II) was an example of a bear market.
During a bear market, the economy slows down (and even crashes), and unemployment rises as companies start laying off workers.
What is the origin of the terms bear market and bull market?
The origin of the terms bull and bear is not really clear, here are the two most widely accepted explanations:
The bear and bull markets are named for the way these two animals attack their prey.
The characteristic of the bull when attacking is that it will use its horns to butt it (symbol of a rising stock price). Meanwhile, the bear is the opposite, it will use its claws to slap down the unfortunate prey (the stock price is going down).
Besides, bears and bulls were fierce opponents for gladiators at the battles of the ancient arenas (Rome and Elizabethan times in London).
A rather romantic term on Wall Street, investors are gladiators trying to beat the market with two symbols, the bull and the bear.
The second explanation is the story of the old teddy bear traders, who would sell skins that they had not received (intermediating). Although they do not have goods in hand, these merchants are ready to go to find customers and receive advance money.
Of course, they would hope to purchase lower priced skins in the future from the hunters. These broker traders were called “bearskin jobbers,” and the term was later used to describe those who expected the market price to drop in the future.
Buy when the bulls appear and “run away” when the bears chase you.
Follow the Twitter page | Subscribe to Telegram channel | Follow the Facebook page