How To Interpret This Term - 'Bearish'?

  • Dec 02, 2018 AEDT
  • Team Kalkine
How To Interpret This Term - 'Bearish'?
  • Understanding the term “Bearish”: Bearish means that the investors are not expecting that stock market, or any stock will not rise shortly. The investors generally become pessimistic, thinks that things will go even worse and takes actions according to it. The investors having bearish view sell the stock to the purchaser at a specified price and believes that the stock price will fall further and to get profit they are the sellers of the call. The buyer of a put is also bearish on the market as they want the price to drop and they may sell the stock at a higher price to the seller of the put contract. The investors should go investments for blue chip companies in the bear market and should long on U.S. Treasury Bills in the case of rising yields.

  • Why there is Bear Market: Bear markets happens when market sentiment of the investors is very low and has negative view which is often due to macro factors like widespread low employment rates and negative economic data for the long time. The most renowned bear market is the Great Depression of the 1930’s, which was accelerated due the Wall Street crash in 1929. The negative feelings had triggered by one event, which led to a long-term downward trend, but the bear market happens when the investors’ bearish sentiments continue for a longer term. The fluctuations in the stock, commodities or currency market are normal and therefore these investments are considered risky assets. It has been seen that only Forex Traders who can short sell on Forex Trading Platforms, can keep making profit in a serious bear market.

Moreover, the investors can become bearish when the neighborhood countries or the countries that has lot of affect in the world economy is tumbling. It will have an overall negative effect on all the countries, and all the stock markets of all over the world will fall further, if the economy of a particular country is dependent on any commodity, which forms the major part of its GDP. Then the drastic fall of the commodity or the bearish outlook on the commodity affects the overall market and gives bearish view on the market. Moreover, if there is major regulatory decision taken for any sector, which is negative for that sector to perform, then the investors become bearish on the sector and does not consider worth investing in the companies.


Disclaimer

This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold. We are neither licensed nor qualified to provide investment advice.

 

All pictures are copyright to their respective owner(s).Kalkinemedia.com does not claim ownership of any of the pictures displayed on this website unless stated otherwise. Some of the images used on this website are taken from the web and are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it below the image.

 

There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.

Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.

As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.

CLICK HERE FOR YOUR FREE REPORT!
   
x
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK