Polls / December 16, 2010

Do you know the difference between a "bull" market and a "bear" market?

The difference between a “bull” and a “bear” market is known by 38% of respondents to the latest eZonomics poll, while 62% say they do not know the difference between the two terms.

On the up: a bull market typically refers to rising prices
When financial market professionals talk about bulls and bears, it is likely to refer to how the markets are performing rather than a recent trip to see animals at the zoo. A bull market is typically one with rising prices. A bear market is typically one with dropping prices. There is no one set definition of terms – and they can also refer to the movements of individual stock and bonds, as well as sentiment surrounding markets.

Are we spirited or sluggish?
The behaviour of the animals is said to resemble the way the terms bull and bear are used in financial markets. Personal finance website Investopedia says “bears are sluggish and bulls are spirited and burly”. This goes some way to understanding how the terms came about. Investopedia says the origin may also relate to the animals’ fighting styles – notes that bulls had been widely considered to be the opposite of bears because the animals were historically pitted against each other in bull-and-bear fights.

The wider animal kingdom
Bulls and bears are not the only animals used to describe financial markets. Doves and hawks are also commonly referenced, for example, in relation to attitudes to inflation and policy positions.

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eZonomics team
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