Understanding the Bulls and the Bears

If you've ever flipped on the television to CNN Financial or paged through the finance section of your local newspaper, you may have seen or heard references made to "the bulls and the bears." If you didn't understand what was meant by these terms, you are about to discover. I'll tell you up front that they weren't talking about basketball and football franchises based in Chicago.

"The bulls and the bears" refers to the performance of the stock market. In the most general terms, "ups" are bulls and "downs" are bears. If the stocks and funds in which you have spent have a"bull" day, you are probably one happy camper. You made money. If, on the other hand, it has been a"bear" day, you are probably not going to be feeling too chipper. Do not forget that no one has cared for the Bears (save folks in Chicago, of course) since 1986 and the days of Walter Payton, William"Refrigerator" Perry, and The Super Bowl Shuffle and you are on the right track.

No one knows for certain where these phrases originated, but they are definitely related to the behavior we associate with those animals. Bulls and bears display uniquely reverse attitudes and behaviors. Bulls will charge ahead bravely or angrily at anything that catches their attention while bears are, by nature, more timid and cautious creatures (although I would not recommend approaching one in the wild, regardless) who will proceed gradually and investigate a situation before taking action. The way that these relate to a "bull or bear" market is evident. When the market is having a solid upswing and is charging ahead by leaps and bounds, it's having a bull run (no, this has nothing to do with the Civil War). When it is on a steady reduction, of course, it is experiencing a bear run (not the Native American who loved Little White Dove, according to the song. That was Running Bear that, I am told, is far too chilly in the winter - especially in Chicago.)

In all seriousness, but the bulls and the bears of the stock market have a profound impact on investors, often making or breaking a person's financial future in one day. The smart investor will pay close attention to the market's bull and bear activities and invest accordingly.