Bear
| A bear is an investor who believes that market prices will decline over a prolonged period of time. This belief is based on the belief that the underlying fundamentals of the market are weak. The bearish outlook is typically used to describe a down market, or a market where prices are expected to fall. When markets are bearish, it is typically because there is an overabundance of supply and not enough demand. This can be caused by a number of factors, such as a weak economy, high interest rates, or political uncertainty. When there is more supply than demand, prices typically fall. Bears will often try to profit from a down market by selling securities and then buying them back at a lower price. This strategy is known as short selling. Short selling is a risky strategy, but can be profitable if done correctly. Bears can also profit from a down market by buying put options. A put option is a contract that gives the buyer the right, but not the obligation, to sell a security at a specified price within a certain time period. If the market price of the security falls below the strike price of the put option, the option will be exercised and the investor will profit. Investors who are bearish on the market often take a more cautious approach to investing. They may allocate a larger portion of their portfolio to cash and fixed-income investments, such as bonds. They may also invest in assets that are less likely to be affected by a market downturn, such as gold or real estate. Being a bear can be a difficult and stressful investment strategy. Bears must constantly monitor the market for signs of a turn. They also need to have the discipline to stick to their strategy, even when the market is going against them. |
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