On Wall Street, the bulls and bears are in a constant struggle. If you haven't heard of these terms already, you undoubtedly will as you begin to invest.
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. Things are just plain rosy! 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".
A bear market is when the economy is bad, recession is looming and stock prices are falling. Bear markets make it tough for investors to pick profitable stocks. 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".
The Other Animals on the Farm - Chickens and Pigs
Chickens are afraid to lose anything. Their fear overrides their need to make profits and so they turn only to money-market securities or get out of the markets entirely. While it's true that you should never invest in something over which you lose sleep, you are also guaranteed never to see any return if you avoid the market completely and never take any risk,
Pigs are high-risk investors looking for the one big score in a short period of time. Pigs buy on hot tips and invest in companies without doing their due diligence. They get impatient, greedy, and emotional about their investments, and they are drawn to high-risk securities without putting in the proper time or money to learn about these investment vehicles. Professional traders love the pigs, as it's often from their losses that the bulls and bears reap their profits.
What Type of Investor Will You Be?
There are plenty of different investment styles and strategies out there. Even though the bulls and bears are constantly at odds, they can both make money with the changing cycles in the market. Even the chickens see some returns, though not a lot. The one loser in this picture is the pig.
Make sure you don't get into the market before you are ready. Be conservative and never invest in anything you do not understand. Before you jump in without the right knowledge, think about this old stock market saying:
"Bulls make money, bears make money, but pigs just get slaughtered!"
What is the future of banking, central banking and financial intermediation in a world in which cryptocurrency is dominant? Let’s speculate a bit...
Trading on the FOREX market is exciting, but what makes it so exciting is what simultaneously makes it risky - volatility. Certain trading strategies...
The digital currency Bitcoin has a dedicated following, regularly makes headlines and inspires countless investors to consider making...
Questions about the value of bitcoins as an investment will likely differ depending on who you ask. Those with a vision of a fully-distributed future...
In 1913 the USA government passed a law, according to which...
A list of professional terms of any sphere is the main instrument for users. Special words help to avoid misunderstanding while working process. They economize time and make life much easier...
Profit is what all traders aim at while working on the stock market. They use a variety of helpers to reach the goal. The most profitable trades are built on thorough analysis made by means of special programs...
Forex gives so many possibilities: a trader can work with shares, commodities, currencies and so on. There is a great diversity in every category, and a trader can choose one or several what he likes the most...
In the era of high technologies and financial prosperity...