Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Bull

What it is:

A bull has a positive outlook on an asset class or an entire market. In investing terminology, bull is the opposite of bear.

How it works (Example):

Investors have perceptions and expectations about the securities markets and whether or not the value of specific securities, as well as the market overall, will rise or fall. The bull (or "bullish investor") makes investments based on his or her belief that the market will climb higher or that certain securities will post gains.

The opposite is the bear (or "bearish investor"), who acts upon his or her belief that the market will decline in value or that certain securities will decline in value.

Why it Matters:

Market perceptions can affect securities prices depending on how many bulls or bears there are in the market. This is best expressed by the bull/bear ratio. In either case, bulls and bears can impact the direction of market movements as a result of the investments they make.

If you're having difficulties remembering the which animal describes what, just remember: A bull attacks by thrusting his horns in an upward movement, while a bear attacks by swiping his paw in a downward movement. Therefore, if the market goes up, it's a bull market; if the market trends down, it's a bear market.

For more details on the history of these words, read The Quirky And Brutal Origins Of The Terms 'Bear' And 'Bull.'

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