Understanding Stock Market Trends

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Trends in the Stock Market

JEN: Do I know you from somewhere? You guys look familiar.

BEAR: You must be mistaken, I don't think we've…

BULL: You've probably seen the famous statue of me on Wall Street. We're basically stock market celebrities.

JEN: Oh!

BEAR: Well, we're more like… unofficial mascots. Bulls and bears are used to describe trends in the stock market. 


BEAR: You know, the upward and downward patterns of the stock market over a period of time. Trends can be short term, intermediate term or long term, and can apply to the market as a whole or to a single stock or commodity.

JEN: OK, so then what's a bull market?

BULL: A bull market. Is. Awesome! Everything is great, the economy is booming, people are finding jobs, and stock prices are rising and rising and you gotta get in on this and buy more stocks ‘cuz the value is just gonna keep climbing and climbing and climbing…

BEAR: Until it doesn't.

BULL: Here we go.

BEAR: That's where the bear market comes in. It's a decline in the stock market. It's when things get bad. And then they get even worse. It's hard to know what stocks to pick when everything's in decline. A recession could be looming. A stock market crash. This could be it. The end of the financial world as we know it. The market value just keeps falling and falling…

BULL: Until it doesn't! And that's where the bull market comes back in. OH, YEAH!

JEN: I see. You guys are real opposites, huh?

BULL: Hey. Look at me. I'm a bullish investor. I buy up lots of stock. I'm optimistic about the future.

BEAR: He's also greedy. I'm more practical. I'm a bearish investor. I sell lots of stock because I'm pessimistic about the future.

BULL: He's also scared.

JEN: Yeah, but why the terms ‘bull and bear'?

BEAR: I read that it's based on our attack styles.

BULL: That's baloney! I think it's because I'm such an upstanding citizen, and because you're such a downer.

BEAR: Well that's funny. I always thought it was because you never shut up and so I look down on you.

BULL: Hey! Rrrrrr…

JEN: Aaaahhh…

BULL: Come on. Which one of us has the right idea here?

JEN: Well…both! And…neither. Bull, your excitement obviously gets everyone amped up—to the point where they buy stock even when the price is high. And Bear, your fear convinces people to sell their stock when prices are low. And buying high and selling low kinda goes against the number one strategy of investing.

BULL: Oops.

BEAR: Oh, right.

JEN: But the weird thing is that, when your outlook actually matches exactly what the stock market is doing, you can both profit from it, too!

BULL: That's what I'm talkin' about!

BEAR: You see!

JEN: I guess it just comes down to how well you can predict the trends.

BEAR: It's hard to do, since trends can only be identified once they've already happened.

BULL: That's what gives me hope.

BEAR: And that's what makes me doubt.

JEN: You know, you guys actually balance each other out. Be good to each other.

JEN: It's not my stop.

BULL: I find you un-BEAR-able.

BEAR: Well, your puns are terri-BULL.

BULL: Hey!

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