Bulls and Bears in the Stock Markets
When you start investing in the stock market, two of the very popular terms that you would hear is the ‘Bulls’ and the ‘Bears’. ‘Expense Ratios’ which are the fees charged by a mutual fund are a better predictor of fund performance than the mutual fund star ratings. It has been generally found that, the lower the fees, the higher the returns.
- Bulls = The ‘Bulls’ is used to refer to an investor with an optimistic market outlook. Hence, a ‘bull’ is an investor who expects prices to rise and so buys now for resale later.Similarly, a ‘bull’ market is when everything in the economy is going great, people are finding jobs, Gross Domestic Product (GDP) is growing, and stocks are rising. So, a ‘bull’ market is one where stock prices are rising.
- Bears = The ‘Bears’ is used to refer to an investor with a pessimistic market outlook. Hence, a ‘bear’ is an investor who expects prices to fall and so sells now in order to buy later at a lower price. Similarly, a ‘bear’ market is when the economy is bad, recession is looming and stock prices are falling. So, a ‘bear’ bear market is one where stock prices are falling.