The Bulls, And The Bears Of The Stock Market.

There are two basic market descriptions used to determine  the general direction of the market most times.The terms are used to describe general actions and attitudes, or sentiment, either of an individual ( bear and bull) or the market.


Bull Markets
The first one is known as the Bulls
market which is used to refer to the market when it is generally rising, typically signaling a strong economic state of the market where gains are the order of the day. A bull market is typified by generally rising stock prices, high economic growth, and strong investor confidence in the economy. A bull market is therefore a financial market where prices of instruments (e.g., stocks) are, on average, trending higher. 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 news item is considered bullish if it is expected to result in higher prices. Bull markets are generally characterized by high trading volume.

Bear market
Bear market is the exact opposite of the bull market . A bear market is when the economy is bad, recession is looming, stock prices are falling and low investors confidence in the economy. Bear markets make it tough for investors to pick profitable stocks.
What this means is that there is
economic downturn, coupled with
rising unemployment figures and of course inflation. A bear market tends to be accompanied by widespread pessimism.

One solution to investment during a bearish market is to invest in small proportions in historically dividend paying companies. Where possible invest in big corporations that have records of gliding through hard economic times successfully. Don’t invest too much on a single stock. You can also diversify your investments into stocks that can never be out of demand. In order words, invest in companies that have long history of survival.

When the stock market slides downwards for a longer time , if market becomes bearish, the money you invest buys more shares and the stocks you possess have less value. Bearish situation gives you opportunity to build up more equity than when the market is soaring.
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 hull 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".