# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Bear

Written By
Paul Tracy
Updated August 9, 2020

What is a Bear?

A bear has a negative outlook on the market (belief that the value of an asset or market will decrease).

How Does a Bear Work?

Investors generally fall into two mindsets: those with an optimistic outlook who foresee prosperity, called "bulls," and those with a pessimistic outlook who foresee decline, called "bears."

A bearish investor will alter their portfolio strategy by liquidating securities they believe are going to lose value in the foreseeable future. A bullish investor, on the other hand, believes securities will continue to rise and would continue to invest long in securities.

Depending on an investor's outlook, they could change from a bear to a bull or vice-versa.

Why Does a Bear Matter?

Market perceptions can affect securities prices depending on how many bulls or bears there are in the market. This is best expressed by the bull/bear ratio. In either case, bulls and bears can impact the direction of market movements as a result of the investments they make.

If you're having difficulties remembering the which animal describes what, just remember: A bull attacks by thrusting his horns in an upward movement, while a bear attacks by swiping his paw in a downward movement. Therefore, if the market goes up, it's a bull market; it the market trends down, it's a bear market.

For more details on the history of these words, read The Quirky And Brutal Origins Of The Terms 'Bear' And 'Bull.'

Ask an Expert about Bear
At InvestingAnswers, all of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Bear.
Be the first to ask a question

If you have a question about Bear, then please ask Paul.

Ask a question

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 2 million monthly readers.

If you have a question about Bear, then please ask Paul.

Ask a question Read more from Paul

Read this next

Paul Tracy - profile
Ask an Expert about Bear

By submitting this form you agree with our Privacy Policy

Share
close
Don't Know a Financial Term?
Search our library of 4,000+ terms