The bull is used to describe optimism, investor confidence, and expectations that stock markets will continue with strong results. The bear, on the other hand, is used to describe stock markets that are expected to consistently fall over a period of months or years.
This is why the bull and bear markets are metaphors: the bull has upward facing horns, and thus thrusts its horns up when it is on the attack.Therefore, a market that is moving upward is called a bull market.
The bear is a large animal that often looks down on its prey. It swipes its dangerous paws downward and as such is used to describe a declining market, or a bear market.You will hear the term "the bulls and the bears are fighting" as they are today. People are torn as to whether the Dow Jones Industrial average that recently crossed the 17,000 mark is at its peak or is still moving to higher highs.
Will the bear win and cause our stock markets to come crashing down? If so, should we sell our positions, taking profits and raising cash?
I have learned that when you attempt to decide which of these impressive animals will win the fight, it is like trying to catch a sharp knife midair: it is possible to catch the knife by the handle and be okay. However, it is equally possible to catch it by the sharp blade and loose a finger or two.Same coin, different viewpoint.
How should you answer this for yourself?
That depends on your situation, how old you are, and whether you can manage the risks emotionally. In other words, can you ride out a bear market until the next bull market begins?
Schedule an appointment and we will help you answer these and other questions.
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