What does this expression mean?
A bear market is when the economy is bad, recession is looming and stock prices are going down. Bear markets make it tough for investors to get profitable returns.
One solution to this is to make money when stocks are falling using a technique called short selling.
Another strategy is to wait on the sidelines until you feel that the bear market is nearing its end, only starting to buy in anticipation of a bull market.
If a person is pessimistic, believing that stocks are going to drop, he or she is called a «bear» and said to have a «bearish outlook».
A bull market is when everything in the economy is great, people are finding jobs, gross domestic product(GDP) is growing, and stocks are rising.
Picking stocks during a bull market is easier because everything is going up. Bull markets cannot last forever though, and sometimes they can lead to dangerous situations if stocks become overvalued.
If a person is optimistic and believes that stocks will go up, he or she is called a «bull» and is said to have a «bullish outlook».