Ever wondered why there are Bulls and Bears in the Stock Market?
Our friends from Utrade sent a very interesting article that a newbie stock market investor can learn a lot from, at least on the terminologies they often hear in the stock market trading and investing. I can still recall when I was still a neophyte, hearing these terms made me think, as to what are they exactly referring to.
Bears, Bulls and Other Animals in the Stock Market Farm
Find out what kind of investor are you!
Bull market, bear market. Anyone who has accidentally landed on the finance channel while watching TV is sure to have heard of these terms. However, the stock market is not just about these two types of animals. It can be compared to a farm with four kinds of animals, and with plants that can bear fruit in the short and long term, but which can be affected by daily weather or even climate change.
So what do these terms mean for the average, and even the new investor? UTrade, the online stock trading platform of Unicapital Securities, shares the secrets of the farm.
The farm is the stock market, and its plants are the stocks. For stock value to grow, farmers or companies, can expand its products or reach, venture into new industries, merge with other companies, or even divest itself of assets. Investors then, are the animals that feed on the fruits of the farm, which is why it is important that they monitor any changes in the market. Changes can include daily movements similar to the weather, which may have little to no effect in the long run, or serious climate changes just like the global economic crisis.
These animals charge forward when they see red, and bullish investors are no different. Perennially optimistic, they believe that stocks continually rise, despite warning signs. Bulls are risk takers who may reap high rewards, but they are also prone to large losses.
The opposite of the bull is the pessimistic bear. Believing that the stock market is always on the way down, they tend to not ride out any dips in the market, also resulting in losses. Careful investors, bears wait on the sideline before investing in anything, which means that sometimes, they have to scavenge for profits.
Two other animals not commonly mentioned are the chickens and the pigs. And UTrade enlightens on exactly what kind of investors they are.
Like the playground name-calling, chickens are afraid to lose anything. They are not often mentioned because they are rarely seen in the stock market, preferring instead to store their money in banks even at little to no interest, or even in their personal stash. Chickens never lose sleep over their investments, but they also do not make notable headway in financial gains.
The common vision of greedy pigs applies to investors as well. The one-time, big-time investor primarily goes by hot tips, is impatient on returns, and generally does not do due diligence on their investments. High risk is their game, and bulls and bears often gain profits on the back of pigs’ losses.
Of the three animals, it’s the pig that stands most to lose, as even chickens can feed on their small share of the farm. Trust the advice of professionals such as UTrade, which provides timely market research and personalized recommendations on stock baskets that are worth investing in. Get on the road to a stable financial future, and start investing today.
UTrade is the online stock brokerage of Unicapital Securities, Incorporated, a leading full-service securities brokerage house licensed by the Securities and Exchange Commission (SEC) and is a bona-fide member of the Philippine Stock Exchange. Through its trading platform, clients can buy and sell any stock listed in the Philippine Stock Exchange, and provides clients with real-time access to research reports and market information. For more information on how to invest, visit www.utradeph.com and like www.facebook.com/UnicapitalOnline.