Introduction: In general, small time proprietors, or partners of a proprietary or partnership firm, are likely to find it rather difficult to get

out of their business should they for some reason wish to do so. This is so because it is not always possible to find buyers for an entire business or a part of business, just when one wishes to sell it. Similarly, it is not easy for someone with savings, especially with a small amount of savings, to readily find an appropriate business opportunity, or a part thereof, for investment. These problems will be even more magnified in large proprietorships and partnerships. Nobody would like to invest in such partnerships in the first place, since once invested, their savings would be very difficult to convert into cash. And most people have lots of reasons, such as better investment opportunity, marriage, education, death, health and so on for wanting to convert their savings into cash. Clearly then, big enterprises will be able to raise capital from the public at large only if there were some mechanism by which the investors could purchase or sell their share of business as ands they wished to do so. This implies that ownership in business has to be broken up into a lager number of small units, such that each unit may be independently & easily bought and sold without hampering the business activity as such. Also, such breaking of business ownership would help mobilize small savings in the economy into entrepreneurial ventures.

Why it is called bull or bear market

Most people agree that the words "Bull" and "Bear" came from fights in the Midwest they would chain a bear to a stake, and release a bull to charge it. the bull would thrust its horns "up" into the bear to win, while the bear would bite "down" on the bull to win. Thus the terms "Bullish" and "Bearish" had came to the stock market.

Read more: http://wiki.answers.com/Q/Why_is_a_bear_market_called_bear#ixzz1Roj124jH

Most people agree that the words "Bull" and "Bear" came from fights in the Midwest they would chain a bear to a stake, and release a bull to charge it. the bull would thrust its horns "up" into the bear to win, while the bear would bite "down" on the bull to win. Thus the terms "Bullish" and "Bearish" had came to the stock market.

After doing some research it seems that there is no clear consensus as to where these names originally came from but there are two stories that have gained the most traction:
1. Bearskin traders would sell bearskins they didnt own (kind of like short selling!), and

hope to make a profit by later purchasing skins from trappers at a lower price (the delivery of the skins to the ultimate end use would occur later). So since the bearskin traders made money in a falling market, a falling market became known as a bear market.

The term bull market comes from the idea that people used to be entertained by bull versus bear fights thus the bull and bear were mortal enemies and if a bear market meant a falling market, then a bull market must mean the opposite. The practice of bull versus bear fighting was popular both in California and in London during Elizabethan times. 2. Another explanation posits that a bull attacks by using an upward swinging motion with its horns, and a bear attacks with a downward swipe of its claws on its enemies.

Why are they called "bull" and "bear" markets, anyway?

Someone recently asked me a question so basic to the markets, I was amazed I hadn't looked into this before: where do the terms "bull" and "bear" market come from? Quick: to the Google-machine!

The Wikipedia entry for "bull market" mentions the Online Etymology Dictionary, which relates the word "bull" to "inflate or swell" and dates its stock market connotation to 1714, but the OED puts the date at 1891. (I am a big OED fan, by the way - I have the printed version at home, complete with magnifying glass.) Maybe this was strictly jargon and not common usage until a hundred years earlier, but here's an interesting example smack in the middle of those two dates. Check out this book from 1775, Every Man His Own Broker, which includes probably one of the first mentions of these terms

I found this on InvestmentTrivia.com, including a more readable version of the text. It refers to an "Act for the better preventing the infamous practice of Stock-jobbing; by which the most palpable and glaring frauds then in vogue, were indeed suppressed: the Bubbles burst, and the Racehorses of Exchange Alley, expired with the date of that act; but BULLS and BEARS still exist in full vigour." Cool, huh?

I liked the story about London bearskin jobbers, who supposedly sold bearskins before the bears had actually been caught. There was even a fancy French proverb against this practice: "ne vendez pas la peau de l'ours avant de lavoir tu" ("don't sell the bearskin before you've killed the bear"). By the time of the South Sea Bubble of 1721 (says Wikipedia), the bear was also associated with short selling. Jobbers would sell bearskins they did not own in anticipation of falling prices, which would enable them to buy them later for an additional profit.

Now we're getting into murky territory factually, but it's still interesting stuff. Another theory holds that the terms come from the word "bulla" which means bill or contract. When a market is rising, holders of contracts for future delivery of a commodity see the value of their contract increase. However in a falling market, the counterparties the "bearers" of the commodity to be deliveredwin because they have locked in a future delivery price that is higher than the current price. I can believe that!

I also liked the story about two old merchant banking families, the Barings and the Bulstrodes. If I were simultaneously invited to both houses for a backyard BBQ, think no further: the Bulstrodes would have the more lavish spread.

There are also a bunch of fun theories tying the terms back to the animals' traits: Bears hibernate, but bulls don't. It might refer to the way each animal attacks: a bull attacks with an upward motion, with its horns; while a bear swipes downward with its paws. Or it might relate to the supposed speed of each animal: bulls charge at high speeds, while bears are supposedly lazy and cautious. This one doesn't quite hold water factually, though, since bears can sometimes outrun a horse.

Have you heard any juicy theories explaining these two terms?

Read more: http://wiki.answers.com/Q/Why_is_a_bear_market_called_bear#ixzz1Roj124jH

History It is said that the bear and bull markets got their names from their attack methods. Historically it was the nature of the bear to swipe down at its opponent. The bull, on the other hand, would swipe up with its horns to attack a predator. Thus the bear represents downward trends and the bull represents up-ward trends. Another possible origin for the use of these two particular animals was the bear and bull fights that used to be popular. The two animals were considered to be opposites, so too are the markets they represent Market trend A market trend is a putative tendency of a financial market to move in a particular direction over time.[1] These trends are classified as secular for long time frames, primary for medium time frames, and secondary lasting short times.[2] Traders identify market trends using technical analysis, a framework which characterizes market trends as a predictable price tendencies within the market when price reaches support and resistance levels, varying over time. The terms bull market and bear market describe upward and downward market trends, respectively[3], and can be used to describe either the market as a whole or specific sectors and securities.[2]

Secular market trend

A secular market trend is a long-term trend that lasts 5 to 25 years and consists of a series of primary trends. A secular bear market consists of smaller bull markets and larger bear markets; a secular bull market consists of larger bull markets and smaller bear markets. In a secular bull market the prevailing trend is "bullish" or upward moving. The United States stock market was described as being in a secular bull market from about 1983 to 2000 (or 2007), with brief upsets including the crash of 1987 and the dot-com bust of 20002002.

In a secular bear market, the prevailing trend is "bearish" or downward moving. An example of a secular bear market was seen in gold during the period between January 1980 to June 1999, culminating with the Brown Bottom. During this period the nominal gold price fell from a high of $850/oz ($30/g) to a low of $253/oz ($9/g),[4] and became part of the Great Commodities Depression.

[edit] Secondary market trend

Secondary trends are short-term changes in price direction within a primary trend. The duration is a few weeks or a few months. One type of secondary market trend is called a market correction. A correction is a short term price decline of 5% to 20% or so.[5] A correction is a downward movement that is not large enough to be a bear market (ex post). Another type of secondary trend is called a bear market rally (sometimes called "sucker's rally" or "dead cat bounce") which consist of a market price increase of only 10% or 20% and then the prevailing, bear market trend resumes. Bear market rallies occurred in the Dow Jones index after the 1929 stock market crash leading down to the market bottom in 1932, and throughout the late 1960s and early 1970s. The Japanese Nikkei 225 has been typified by a number of bear market rallies since the late 1980s while experiencing an overall long-term downward trend.

Primary market trend

A primary trend has broad support throughout the entire market (most sectors) and lasts for a year or more.

Bull market
A bull market is associated with increasing investor confidence, and increased investing in anticipation of future price increases (capital gains). A bullish trend in the stock market often begins before the general economy shows clear signs of recovery.
Examples

India's Bombay Stock Exchange Index, SENSEX, was in a bull market trend for about five years from April 2003 to January 2008 as it increased from 2,900 points to 21,000 points. A notable bull market was in the 1990s and most of the 1980s when the U.S. and many other stock markets rose; the end of this time period sees the dot-com bubble.
What is Bull Market?
There are two classic market types used to characterize the general direction of the market. Bull markets are when the market is generally rising, typically the result of a strong economy. A bull market is typified by generally rising stock prices, high economic growth, and strong investor confidence in the economy. Bear markets are the opposite. A bear market is typified by falling stock prices, bad economic news, and low investor confidence in the economy.

A bull market is a financial market where prices of instruments (e.g., stocks) are, on average, trending higher. The bull market tends to be associated with rising investor confidence and expectations of further capital gains.

A market in which prices are rising. A market participant who believes prices will move higher is called a "bull". A news item is considered bullish if it is expected to result in higher prices.An advancing trend in stock prices that usually occurs for a time period of months or years. Bull markets are generally characterized by high trading volume. Simply put, bull markets are movements in the stock market in which prices are rising and the consensus is that prices will continue moving upward. During this time, economic production is high, jobs are plentiful and inflation is low. Bear markets are the opposite-stock prices are falling, and the view is that they will continue falling. The economy will slow down, coupled with a rise in unemployment and inflation. A key to successful investing during a bull market is to take advantage of the rising prices. For most, this means buying securities early, watching them rise in value and then selling them when they reach a high. However, as simple as it sounds, this practice involves timing the market. Since no one knows exactly when the market will begin its climb or reach its peak, virtually no one can time the market perfectly. Investors often attempt to buy securities as they demonstrate a strong and steady rise and sell them as the market begins a strong move downward. Portfolios with larger percentages of stocks can work well when the market is moving upward. Investors who believe in watching the market will buy and sell accordingly to change their portfolios.Speculators and risk-takers can fare relatively well in bull markets. They believe they can make profits from rising prices, so they buy stocks, options, futures and currencies they believe will gain value. Growth is what most bull investors seek.

What is Bear Market?

Bear market
What is a Bear Market? In the world of stock of the stock market, the term Bear Market signifies a down market. Taken for its anecdotal use when compared with the animal, the bear market signals to investors that the market is in sleep mode, or like a bear: hibernating. While a bear market does not necessarily mean that investors will lose money or their stocks will be devalued, it does most always mean that the majority of stocks will not gain much ground. For the most part a bear market will make queasy investors start to pull out their investments, and more experienced investors to sit back and wait the slow times out. A down market is not

all dark skies and bad news however; it is still possible to make money in a bear market and many skilled and patient investors get it done every time the market slows.
The opposite of a bull market, a bear market is a period of several months or years during which securities prices consistently fall. The term is typically used in reference to the stock market, but it can also describe specific sectors such as real estate, bond, or foreign exchange. The bear market that occurred in the U.S. equity markets from 1929 to 1933 is one of the most famous bear markets in history.

Bear Market Survival Kit

Getting your portfolio through a stock market that has gone bear is not all that difficult. The key is being able to see beyond the daily horizons of financial news and keep your eyes on the facts: on average, bear market or bull (upswing market, the opposite of a bear market) notwithstanding, the stock market makes about 30% in gains over a 10 year period. So the key to a bear market: dont panic and stick it out. Most often except in extreme cases such as a global depression or recession, the stock market will not lose much of its inherent value during a bear market. True the average investor will most likely not be counting the profits and dividends returns, but their money is still there. The key to a bear market is to be more patient than the bear. The stock market will always rebound.
A market that falls significantly and consistently from its peak is referred to as a bear market. Conventionally, the threshold for declaring a bear market is a 20% drop from its peak. A drop of less than 20% is referred to as a correction. The crash of 1929 began what is arguably the most famous bear market in American history. A bear market can be a difficult time for retail investors, because they're faced with the prospect of watching their investments decline in value day after day. This can lead to impulsive selling. During a bear market, investments on margin will require more cash to cover the broker's minimum margin requirements, which may force an investor to sell stocks he or she would rather keep in the market. Foolish investors will take a calmer view of a bear market, and will often see it as an opportunity to buy good companies at a cheaper price. They believe stocks should be sold if the investment thesis has changed or if they need the money, but not just because the market has lowered the current price being offered for the shares. Bear markets are a test of investor patience, since nobody knows how long each one will last. However, they are often seen in retrospect as the periods when the stock market offers the best opportunities to make long-term gains.

Some say the term "bear market" comes from "bear skin jobbers," who sold bear skins before they caught the bears. This term eventually was used to describe short-sellers, who make money buying and selling shares that they don't own (they borrow them). Short-sellers profit when the price of their shares goes down. The theory further goes that since bear baiting and bull baiting were common "sports," bull became the counterpart of bear. Others will say the term bear comes from the fact that bears swipe their paws down when fighting, whereas bulls swipe their horns up.

Bear Market investments:

Bear Market Investments is a news aggregator and publisher of articles about financial institutions, commodities, currencies and real estate. We track financial trends that relate to bear market investment opportunities, which might help investors protect their assets and possibly benefit from a severe and prolonged economic contraction. Legal Disclaimer: News articles published on this Website are created by second and third party news organizations and Web blogs. The information contained in these articles are for the purpose of information only and are not intended as investment advice. Any content on the Bearmarketinvestments.com Website, which might include article links, resource links and advertisements, shall not constitute a recommendation to buy or sell any security or financial instrument, or to participate in trading or investment strategies. The content on this Website are entirely the opinions of the author(s) and do not necessarily represent the opinions of the Bearmarketinvestments Website. Bearmarketinvetments Website visitors are solely reponsible for their own actions taken as a result of content, or advertisements contained on this Website. You should always Consult with a licenced investment adviser before making any investment decisions.

A bear market is a general decline in the stock market over a period of time.[6] It is a transition from high investor optimism to widespread investor fear and pessimism. According to The Vanguard Group, "While theres no agreed-upon definition of a bear market, one generally

accepted measure is a price decline of 20% or more over at least a two-month period."[7] It is sometimes referred to as "The Heifer Market" due to the paradox with the above subject.
Examples

A bear market followed the Wall Street Crash of 1929 and erased 89% (from 386 to 40) of the Dow Jones Industrial Average's market capitalization by July 1932, marking the start of the Great Depression. After regaining nearly 50% of its losses, a longer bear market from 1937 to 1942 occurred in which the market was again cut in half. Another long-term bear market occurred from about 1973 to 1982, encompassing the 1970s energy crisis and the high unemployment of the early 1980s. Yet another bear market occurred between March 2000 and October 2002. The most recent example occurred between October 2007 and March 2009.
The opposite of a bull market is a bear market when prices are falling in a financial market for a prolonged period of time. A bear market tends to be accompanied by widespread pessimism.A bear market is slang for when stock prices have decreased for an extended period of time. If an investor is "bearish" they are referred to as a bear because they believe a particular company, industry, sector, or market in general is going to go down. By definition, a bear market is when the stock market falls for a prolonged period of time, usually by twenty percent or more. It is the opposite of a bull market. This sharp decline in stock prices is normally due to a decrease in corporate profits, or a correction of overvaluation (i.e., stocks were too expensive and fell to more reasonable levels). Investors who are scared by these lower earnings or lofty valuations sell their stock, causing the price to drop. This causes other investors to worry about losing the money they've invested, so they sell as well; the vicious cycle begins. One of the best examples of a prolonged bear market is that of 1970's when stocks went sideways for well over a decade. Experiences such as these are generally what scare wouldbe investors away from investing. Ironically, this keeps the bear market alive; because no few buyers are purchasing investments, the selling continues. How does a bear market affect my investments? Generally, a bear market will cause the securities you already own to drop in price. The decline in their value may be sudden, or it may be prolonged over the course of time, but the end result is the same: the quoted value of your holdings is lower. This leads to two fundamental principles: 1.) A bear market is only bad if you plan on selling your stock or need your money immediately. 2.) Falling stock prices and depressed markets are the friend of the long-term, value investor. In other words, if you invest with the intent to hold your investments for decades, a bear market is a great opportunity to buy. It always amazes me that the "experts" advocate selling after the market has fallen. The time to sell was before your stocks lost value. If they

know everything about your money, why they didn't warn you the crash was coming in the first place? What do I do with my money in a bear market? The first thing you need to do is to look for companies and funds that are going to be fine ten or twenty years down the road. If the market crashed tomorrow and caused Gillette's stock price to fall 30%, people are still going to buy razors. The basics of the business haven't changed. This brings us to our third principle: 3.) You must learn to separate the stock price from the underlying business. They have very little to do with each other over the short-term. When you understand this, you will see falling stock markets like a clearance sale at your favorite furniture store; load up on it while you can, because history has borne out that prices will eventually return to more reasonable levels.

How It Works/Example:
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Identifying and measuring bear markets is both art and science. One common measure says that a bear market exists when at least 80% of all stock prices fall over an extended period. Another measure says that a bear market exists if certain market indices -- such as the Dow Jones Industrial Average and the S&P 500 -- fall at least -15%. Of course, different market sectors may experience bear markets at different times. The causes and characteristics of bear markets vary, but most financial theorists agree that economic cycles and investor sentiment both play a role in the creation and momentum of bear markets. In general, a weak or weakening economy -- indicated by low employment, low disposable income, and declining business profits -ushers in a bear market. The existence of several new trading lows for well-known companies might also indicate that a bear market is occurring. It is important to note that government involvement affects bear markets. Changes in the federal funds rate or in various tax rates can encourage economic expansion or contraction, ultimately leading to bull or bear markets. Falling investor confidence is perhaps more powerful than any economic indicator, and it also often signals a bear market. When investors believe something is going to happen (a bear market, for example), they tend to take action (selling shares in order to avoid losses from expected price decreases), and these actions can ultimately turn expectations into reality. Although it is a difficult measure to quantify, investor sentiment shows through in mathematical measurements such as the put/call ratio, the advance/decline line, IPO activity, and the amount of outstanding margin debt. Regardless of their exact beginnings and ends, bear markets typically have four phases. In the first phase, prices and investor sentiment are high, but investors are beginning to take profits and exit the market. In the second phase, stock prices begin to fall quickly, trading activity and corporate earnings fall, and positive economic indicators are below average. Investor sentiment also gets more pessimistic and some investors panic. Market indices and many securities reach new trading lows, trading activity continues to decrease, and dividend yields reach historic highs. In the third phase,

prices and trading volume increase somewhat as speculators enter the market. In the fourth and final phase, stock prices continue to fall, but they do so at a slower pace. As investors find prices low enough and as they react to good news or positive indicators, bear markets often eventually give way to bull markets

Why It Matters:
Bear markets cost investors money because security prices generally fall across the board. But bear markets don't last forever, and they don't always give advance notice of their arrival. The investor must know when to buy and when to sell to maximize his or her profits. As a result, many investors attempt to "time the market," or gauge when a bear market has begun and when it is likely to end. Analysts spend thousands of hours trying to mathematically determine what will trigger the next bear market and how long it will last, and technical analysis is especially prevalent in this effort.

Market top
A market top (or market high) is usually not a dramatic event. The market has simply reached the highest point that it will, for some time (usually a few years). It is retroactively defined as market participants are not aware of it as it happens. A decline then follows, usually gradually at first and later with more rapidity. William J. O'Neil and company report that since the 1950s a market top is characterized by three to five distribution days in a major market index occurring within a relatively short period of time. Distribution is a decline in price with higher volume than the preceding session.
[edit] Examples

The peak of the dot-com bubble (as measured by the NASDAQ-100) occurred on March 24, 2000. The index closed at 4,704.73 and has not since returned to that level. The Nasdaq peaked at 5,132.50 and the S&P 500 at 1525.20. A recent peak for the broad U.S. market was October 9, 2007. The S&P 500 index closed at 1,576 and the Nasdaq at 2861.50.

[edit] Market bottom

A market bottom is a trend reversal, the end of a market downturn, and precedes the beginning of an upward moving trend (bull market). It is very difficult to identify a bottom (referred to by investors as "bottom picking") while it is occurring. The upturn following a decline is often short-lived and prices might resume their decline. This would bring a loss for the investor who purchased stock(s) during a misperceived or "false" market bottom. Baron Rothschild is said to have advised that the best time to buy is when there is "blood in the streets", i.e., when the markets have fallen drastically and investor sentiment is extremely negative.[8]
[edit] Examples

Some examples of market bottoms, in terms of the closing values of the Dow Jones Industrial Average (DJIA) include:

The Dow Jones Industrial Average hit a bottom at 1738.74 on 19 October 1987, as a result of the decline from 2722.41 on 25 August 1987. This day was called Black Monday (chart[9]). A bottom of 7286.27 was reached on the DJIA on 9 October 2002 as a result of the decline from 11722.98 on 14 January 2000. This included an intermediate bottom of 8235.81 on 21 September 2001 (a 14% change from 10 September) which led to an intermediate top of 10635.25 on 19 March 2002 (chart[10]). The "tech-heavy" Nasdaq fell a more precipitous 79% from its 5132 peak (10 March 2000) to its 1108 bottom (10 October 2002). A bottom of 6,440.08 (DJIA) on 9 March 2009 was reached after a decline associated with the subprime mortgage crisis starting at 14164.41 on 9 October 2007 (chart[11]).

[edit] Investor sentiment

Investor sentiment is a contrarian stock market indicator. By definition, the market balances buyers and sellers, so it's impossible to literally have 'more buyers than sellers' or vice versa, although that is a common expression. The market comprises investors and traders. The investors may own a stock for many years; traders put on a position for several weeks down to seconds. Generally, the investors follow a buy-high, sell-low strategy.[12] Traders attempt to "fade" the investors' actions (buy when they are selling, sell when they are buying). A surge in demand from investors lifts the traders' asks, while a surge in supply hits the traders' bids. When a high proportion of investors express a bearish (negative) sentiment, some analysts consider it to be a strong signal that a market bottom may be near. The predictive capability of such a signal (see also market sentiment) is thought to be highest when investor sentiment reaches extreme values.[13] Indicators that measure investor sentiment may include:[citation needed]
Investor Intelligence Sentiment Index: If the Bull-Bear spread (% of Bulls - % of Bears) is close to a historic low, it may signal a bottom. Typically, the number of bears surveyed would exceed the number of bulls. However, if the number of bulls is at an extreme high and the number of bears is at an extreme low, historically, a market top may have occurred or is close to occurring. This contrarian measure is more reliable for its coincidental timing at market lows than tops. American Association of Individual Investors (AAII) sentiment indicator: Many feel that the majority of the decline has already occurred once this indicator gives a reading of minus 15% or below. Other sentiment indicators include the Nova-Ursa ratio, the Short Interest/Total Market Float, and the Put/Call ratio.

[edit] Market capitulation

Market capitulation refers to the threshold reached after a severe fall in the market, when large numbers of investors can no longer tolerate the financial losses incurred.[14] These investors then capitulate (give up) and sell in panic, or find that their pre-set sell stops have been triggered, thereby automatically liquidating their holdings in a given stock. This may trigger a further

decline in the stock's price, if not already anticipated by the market. Margin calls and mutual fund and hedge fund redemptions significantly contribute to capitulations.[citation needed] The contrarians consider a capitulation a sign of a possible bottom in prices. This is because almost everyone who wanted (or was forced) to sell stock has already done so, leaving the buyers in the market, and they are expected to drive the prices up. The peak in volume may precede an actual bottom.

[edit] Changes with consumer behavior

Market trends are fluctuated on the demographics and technology. In a micro economical view, the current state of consumer trust in spending will vary the circulation of currency. In a micro economical view, demographics within a market will change the advancement of businesses and companies. With the introduction of the internet, consumers have access to different vendors as well as substitute products and services changing the direction of which a market will go. Despite that it is believed that market trends follow one direction over a matter of time, there are many different factors that change can change this idea. Technology s-curves, explained in the book The Innovator's Dilemma, states that technology will start slow then increase in users once better understood but level off once another technology replaces it, proving that change in the market is actually consistent.

[edit] Etymology
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The precise origin of the phrases "bull market" and "bear market" are obscure. The Oxford English Dictionary cites an 1891 use of the term "bull market". In French "bulle spculative" refers to a speculative market bubble. The Online Etymology Dictionary relates the word "bull" to "inflate, swell", and dates its stock market connotation to 1714.[15] The fighting styles of both animals may have a major impact on the names. When a bull fights it swipes its horns up; when a bear fights it swipes down on its opponents with its paws.[16] When the market is going up, it is similar to a bull swiping up with its horns. When the market is going down it is similar to a bear swinging its paws down. One hypothetical etymology points to London bearskin "jobbers" (market makers),[17] who would sell bearskins before the bears had actually been caught in contradiction of the proverb ne vendez pas la peau de l'ours avant de lavoir tu ("don't sell the bearskin before you've killed the bear") an admonition against over-optimism.[18] By the time of the South Sea Bubble of 1721, the bear was also associated with short selling; jobbers would sell bearskins they did not own in anticipation of falling prices, which would enable them to buy them later for an additional profit. Another plausible origin is from the word "bulla" which means bill, or contract. When a market is rising, holders of contracts for future delivery of a commodity see the value of their contract increase. However in a falling market, the counterpartiesthe "bearers" of the commodity to be deliveredwin because they have locked in a future delivery price that is higher than the current price.[citation needed] Some analogies that have been used as mnemonic devices:

Bull is short for 'bully', in its now mostly obsolete meaning of 'excellent'.[citation
needed]

It relates to the speed of the animals: bulls usually charge at very high speed whereas bears normally are thought of as lazy and cautious movers[citation needed]a misconception because a bear, under the right conditions, can outrun a horse.[19] They were originally used in reference to two old merchant banking families, the Barings and the Bulstrodes.[citation needed] Bears hibernate, while bulls do not.[citation needed] The word "bull" plays off the market's returns being "full" whereas "bear" alludes to the market's returns being "bare".[citation needed]

In describing financial market behavior, the largest group of market participants is often referred to, metaphorically, as the herd. This is especially relevant to participants in bull markets since bulls are herding animals. A bull market is also sometimes described as a bull run. Dow Theory attempts to describe the character of these market movements.[20] International sculpture team Mark and Diane Weisbeck were chosen to re-design Wall Street's Bull Market. Their winning sculpture, the "Bull Market Rocket" was chosen as the modern, 21st century symbol of the up-trending Bull Market

Difference Between Bull and Bear Market

The investment community, like most other professions, uses terminology and buzzwords that may make sense to industry insiders but are gobbledygook to the average guy on the street. Let's face it, how many ordinary citizens know what terms like arbitrage, hockey stick bidding or red chip stock mean? When you don't know the industry lingo, it is important to know and trust your broker.

Any investment broker worth his salt will be a teacher at heart, and help you understand what terms like a bull or bear market mean for your financial health.

Generalities
The stock market is a loose term that encompasses the entire financial marketplace. It involves not only stock investments, but bonds, government-backed securities, real estate trusts, options, commodities, money markets, derivatives and a host of other investment vehicles, most of which the average individual investor has little interest in. On a more local level, the stock market refers to a stock exchange where investments are traded. The stock market as a whole trends upwards, downwards or sideways, usually as a reflection of the general economy. When the stock market trends upward it is said to be a "bull market." When the stock market trends downward it is said to be a "bear market." A sideways trend in the stock market is said to be a "mixed market."

Bull Market
A bull market is loosely defined as a period when the stock market as a whole is rising in price. Certain sectors of the economy may experience a bull market while other sectors remain stagnant or are in decline. The classic way of making money in stocks during a bull market is to purchase a security, wait for the stock price to go up, then sell. The difference between the purchase price and the sale price of the stock is referred to as a capital gain.

Bear Market
A bear market is loosely defined as a period when the stock market as a whole is decreasing in price. Just as with a bull market, not all sectors of the economy may participate. Certain sectors of the economy may decline while others rise. Making money during a bear market can be more challenging than during a bull market, but it can be done. Investors can protect their profits or generate current income by selling call options against stock they currently own. This is referred to as writing a covered call, and it involves selling another investor the right to purchase your stock at a set price for a set period of time in exchange for a premium. If the underlying stock does not increase in value to the set price, known as the strike price, the option will likely expire unexercised. The original investor gets to keep both his stock and the premium.

Considerations
All investments in the stock market, whether in a bull market or in a bear market, involve some risk. Some investments are riskier than others, and some investments are purely speculative and involve high risk. Past performance of any security is never a guarantee of future results. Investors in the stock market may lose some or all of their investment. You should never make an investment in any product that you do not understand. When in doubt, ask your broker for a full explanation prior to handing over your hard earned cash.

Bulls Vs Bears
Terminology used by stock brokers and Wall Street insiders tends to be rather complicated what with jargon such as margins, small cap, and indices, it can be difficult to tell what the devil these people are talking about. Still, the most basic of stock market terms, bull and bear, date back to the 19th century and are not tied to any complicated mathematical analysis. While the origin of the stock market terms might be somewhat vague, their definitions are quite precise. Bull refers to an investor who believes that a market or individual stock issue will rise in value. A bear is someone who believes the opposite, that the market or stock will drop in value. Generally, a rise or fall of 20 percent is the benchmark for describing a bull or bear market. A bullish market is one that is rising and a bearish market is one that is falling. A bull is an optimist who thinks prices will rise and a bear is a pessimist who thinks prices will fall. Learn more about Bullish & Bearish volumes.

Bear Came First

According to people who research this type of thing, the term bear market came first and dates back to the 17th century from the proverb that it was unwise to sell the bears skin before one has caught the bear. By the 18th century, the term bear skin was shortened to the familiar bear market and was applied to stock being sold by a speculator. The term bulls and bears stock market came into common usage among financiers in 1720 during a financial scandal

known as the South Sea Bubble that revolved around a speculative investment scheme involving the South Sea Company.

Enter the Bull

This was about the same time the term bull made its debut, which originally referred to a speculative purchase of stock on the expectation that it would rise. The earliest recorded use of the term dates back to 1714. It is thought the term gained favor because of its relationship to the other animal term bear. The use of the two terms also has roots in English hunting culture and the expressed characteristics of the two animals. Bulls were known to be animals that are aggressive and bold, unafraid to charge ahead. On the other hand, the bear is a creature that is much less outwardly aggressive and tends to hide from it perceives to be approaching danger.

The Bull vs Bear

In a tradition that dates back 150 years to the California gold rush, a bull and a bear were thrown into a ring to do battle as entertainment for the miners. The modern miners in this spectacle were a group of stockbrokers and financial service professionals from the United States and Canada. The furry critters providing the entertainment were two widely followed stock market prognosticators one an unapologetic bull and the other an unabashed bear.

Personalities
The terms bull vs bear market are used to describe market conditions and also to characterize particular analysts and brokers. On Wall Street it generally is considered to be cool to be known as a bull, someone who is optimistic about the future of the market. Those with a more conservative approach to investing inherit the general moniker of being bears.

Make Money in Todays Market

Knowing the difference between a bull and bear market is great, but you need to know the stock trading strategies, stock market tips and tactics that the professionals use to make money in each kind of market.

Read more: Bulls Vs Bears - Stock Market Bulls and Bears - Bull/Bear Markets | Qwoter http://www.qwoter.com/college/InvestingEssentials/bull_vs_bear_markets.html#ixzz1RofZW9Du Get more advice from Qwoter Stock Tips

INVESTING DURING BULL MARKETS A key to successful investing during a bull market is to take advantage of the rising prices. For most, this means buying securities early, watching them rise in value and then selling them when they reach a high. However, as simple as it sounds, this practice involves timing the market. Since no one knows exactly when the market will begin its climb or reach its peak, virtually no one can time the market perfectly. Investors often attempt to buy securities as they demonstrate a strong and steady rise and sell them as the market begins a strong move downward. Portfolios with larger percentages of stocks can work well when the market is moving upward. Investors who believe in watching the market will buy and sell accordingly to change their portfolios. Speculators and risk-takers can fare relatively well in bull markets. They believe they can make profits from rising prices, so they buy stocks, options, futures and currencies they believe will gain value. Growth is what most bull investors seek. The opposite of all this is true when the market moves downward.

INVESTING DURING BEAR MARKETS Successful investing in bear markets can involve many different strategies. Some investors try to secure their assets in less volatile securities such as fixed-income bonds or money market securities. Others wait for the downward trend of prices to subside. When it does, they begin buying. Still others seek to take advantage of the falling prices. When the market goes down, portfolios with a greater percentage of bonds and cash fare well because their returns are fixed. Many financial advisors emphasize the value of fixed income and cash equivalent investments during market downturns. Another strategy is to simply wait for the downward prices to reverse themselves. Investors who wish to remain invested in stocks may seek out companies in industries that perform well in both bull and bear markets -- shares in these companies are called defensive stocks. The food industry, utilities, debt collection and telecommunications are popular defensive stocks. However, there is no guarantee that a defensive stock will perform well during any market period. Finally, some investors attempt to exploit profits from the downward price movements. One method is to sell at the beginning of a downward turn, when prices are still high. Proponents of this strategy wait for prices to bottom out before reinvesting in the market. However, as simple as it sounds, this process involves the nearly impossible task of timing the market. Another, more complicated way to attempt to profit from falling prices is called selling short.

Ups and down in the Bull and Bear Market:

What causes bull and bear markets? They are partly a result of the supply and demand for securities. Investor psychology, government involvement in the economy and changes in economic activity also drive the market up or down. These forces combine to make investors bid higher or lower prices for stocks. To qualify as a bull or bear market, a market must have been moving in its current direction (by about 20% of its value) for a sustained period. Small, short-term movements lasting days do not qualify; they may only indicate corrections or short-lived movements. Bull and bear markets signify long movements of significant proportion. There are several well-known bulls and bears in American history. The longest-lived bull market in U.S. history is the one that began about 1991 and is still climbing. Other major bulls occurred in the 1920's, the late 1960's and the mid-1980's. However, they all ended in recessions or market crashes. The best-known bear market in the U.S. was, of course, the Great Depression. The Dow Jones Industrial Average lost roughly 90 percent of its value during the first three years of this period. There were also numerous others throughout the twentieth century, including those of 1973-74 and 1981-82.
We Can Employ Both Bull and Bear Market Tactics for Your Portfolio
Ken Fisher's Decades-Long History of Market Calls* Virtually all investors experience up and down markets throughout their investing lifetimes. A money manager needs to be able to navigate both. Doing so means attempting to see changes in the market before they happen. No one can do this perfectly, but few investment professionals have a public history of stock market calls as long as Ken Fisher's. Ken has been making forecasts in his Portfolio Strategy column in Forbes magazine for over 25 years. In his column, Ken frequently provides his opinion of the direction the stock market is heading, what types of stocks to own, the impact of politics on capital markets, the state of the US and global economies, and more. Ken has a public record of not only forecasting 3 of the last 4 bear markets to help readers avoid at least a portion of such forecasted markets, but also advising readers not to get scared out of the market by normal corrections and market volatility. Our forecasting is never perfect. No one's is. But Ken and our Investment Policy Committee have a long history of navigating our clients' portfolios through good times and bad.

How To Predict Bear and Bull Markets?

The easiest way to predict both types of markets is to realize that what goes up must come down. That is, if the market is rising, then you know that at some point it will start to fall again. Similarly, if the market is currently falling, you can be certain that eventually it will pick up again. There are no precise ways to predict either bull or bear markets, although general social economic situations can help you to determine what will happen. A country which wages a war will experience bullish market conditions as government contracts create more jobs and boost investor confidence if their expectation is to win. Sudden international crises push the market downward and create bearish conditions. News is very often a good indicator of where investors are headed. The reports will inform about loss of investor confidence as well as sudden economic downturns that may affect the market. If you notice from stock market research that several indexes have changed by 15% to 20%, you can be sure that market direction is changing. When you notice such changes, it is time to sit up and take notice. You may be headed for a bullish or bearish market.

Market Conditions In Both Cases

While referring to markets is either bull or bear is very general, there are certain types of specific markets conditions that exist in both markets. For example, a bullish market is often accompanied by a sudden increase demand for securities and smaller supplies of the same securities. This is because more investors are willing to buy securities while fewer wish to sell. This, of course, only pushes prices higher. The very opposite is true in a bearish market. The investor's behavior is another condition prevalent in both markets. In bullish markets, there's a sudden increase interest in the stock market. More people are hopeful about possible profits on the stock market and most people are optimistic about economic conditions. In a bearish market, investors are not very confident and therefore invest less.

Investing During Bear and Bull Markets

New investors often assume that they need to avoid investing during bear markets, and invest heavily during bull markets. This is not the case. Experienced investors know that you need to be able to invest in any sort of market condition, provided that you do so wisely. Each investor has a different strategy for dealing with a bull market or bearish markets. Many investors try to take advantage of bull markets by buying stocks as soon as the market gets bullish, and then starting to sell when prices seem to have reached their peak. The difficulty, of course, is that it is almost impossible to tell when the trend is beginning and when it will peak. In general, investors can take more chances with the market during a bullish phase. Since overall prices will rise, the chances of making a profit are good. In bearish market conditions, prices are falling and the possibility of loss is pretty good. What is worse, it is not always possible to tell when bearish conditions will end. Therefore, if you invest during such market conditions, you may have to suffer some losses before bullish times return and you're able to realize a profit. For this reason, many investors decide on short selling or fixed income securities and other more conservative types of investment. Defensive stocks are another good option that remain stable during bearish conditions. On the other hand, some investors see bearish market conditions as an ideal time to invest in more stocks. Since many people are selling off their stocks -- including valuable blue-chip stocks -- at low prices, it is possible to set up long-term investments that will prove valuable during bullish times. While every investor loves to see the upswing in prices during a bull market, the wise investor will be able to handle a bear market as well. Whether you are just beginning to invest or are an experienced investor, learning to deal with various market conditions you neen not panic but decide patiently on investment.

Stocks Bull and Bear Market Simple Indicator

Dr. Steve Sjuggerud writes: I don't know why everyone doesn't get it. Let's see if you do: When the stocks are above the blue line, it's a bull market, and you want to own stocks. When stocks are below the blue line, it's a bear market. Is that hard to get? Take a look:

If you'd followed an investment strategy based on this simple idea, your portfolio would have beaten the best fund managers in the world. Even better, it would have taken you only two hours a year to follow (just 10 minutes a month). Since the start of that chart above, the main stock market index (the S&P 500) has risen 4% per year. If you'd bought when the stock market was below the blue line, you'd have lost money at a rate of over 11% per year. If you'd bought when the

stock market was above the blue line, you'd have made a 12% profit per year not including dividends. Since bull markets are longer than bear markets, you'd be "in" about two-thirds of the time and "out" one-third of the time. This little system works even if you look further back...

I ran the numbers going back to the early 1970s. And the results are similar... Stocks rise 12% a year when they're above the blue line. And you lose money when stocks are below the line. Also, similarly, you're "in" stocks about two thirds of the time. So the strategy has worked for 40 years... at least. This "blue line strategy" is nothing fancy by the way... It's the 10-month moving average of the S&P 500 index. You just take the closing prices of the stock market at the end of the each of the last 10 months and average them. If the current price is above the average, you buy. If it is below the average, you step aside. There's nothing special about the 10-month average. This system works with the eight-month average, nine-month average, 11-month average... whatever. It's not far off from the 40-week average or the 200-day average. These are typical things that traders look at. My point is, I'm not doing some sort of mathematical gymnastics. It is simple. I'm bringing this little strategy up today because important things are happening with it right now... For the last year, stocks have been above the blue line. We've been in a bull market. But that appears to be ending right now. If June ended today (as I assumed in the chart above), the stock market would be below the line... and it would be time to be "out." The great thing about this strategy is the blue line doesn't care about housing bubbles, wars, dotcom booms and busts, or government spending. The blue line does no analysis at all. With the blue line strategy, you spend two hours a year (10 minutes a month to calculate the average), and you beat the stuffing out of the best fund managers in the world. The blue line strategy has only issued two recommendations since late 2006... It said "sell" stocks back in 2007. And it said "buy" in mid-2009. Don't you wish you would have ignored everyone and everything else in that time and simply gone with the blue line strategy? After a year of saying "buy stocks" if things stay as they are, the blue line strategy looks like at the end of this month it could be issuing its first "sell" recommendation since 2007. The blue line strategy has a great track record... What are you gonna do?

Good investing,