Animals can help us understand how the market dictates movement, up or down.
The financial world can seem much like a zoo. Over the years many terms now used derived from animals you may find at the zoo. The reason is simple, the animal terms are easy for people to relate. As an example, a bear hibernates, so if the market is in decline or negativity about investing is in circulation, it might be time not to invest or “hibernate.” The bull represents aggression and growth; thus a bull market signifies growth.
In years past many financial terms have used animals as a synonym such as a duck which meant floating along without any direction and doing nothing except quacking.
Or a fish which meant to take a chance and buy any stock that looked reasonable regardless of any specific goal. Over time, we have three animal terms as surviving topics.
- Bear: The word normally associated with a bear market is pessimism, in other words, a feeling that the market will go down or may stay down. Investors were fearing a down market are negative to investing, or like a bear, they go to sleep and do not invest. Many short term investors often confuse a bear market with a correction, and a market correction is usually a shorter time period such as 1-3 months.
- Bull: A bull market is just the opposite of a bear market. Bulls are aggressive and think the market will grow and increase. Just like a bull, the market is expected to be hard to control and is heading up. Bull markets are optimistic and confident; bulls thrust their horns up in the air signifying a belief in growth in the market.
- Deer: Not often used by many investors but still meaningful. A deer market is a market doing nothing, simply staying neutral or flat. It can be a time of low activity with a specific definition much like the bull and bear market definitions: timidity. The market is not trending in any real direction, staying flat. As investors, most people will follow trends, up, down or neutral it all depends on your view of what the market will do.
The best approach to investing might be to have your goals evaluated and your investments redirected to an allocation that makes sense over the long run.
There is an old saying about investing in the stock market: “the bulls make money, the bears make money, but the pigs get slaughtered.”
Investing for specific goals is a solid approach, as you edge closer to your anticipated goal, many smart investors begin the move towards safety. Annuities can be a solid choice for you when it becomes your turn to run to safety.