BEARISH MARKET Meaning and
Definition
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A bearish market refers to a situation in the financial markets where the prices of stocks, commodities, or other tradable assets are experiencing a prolonged decline or are expected to decline in the foreseeable future. It is characterized by investor pessimism, prevailing selling pressure, and a general expectation of decreasing market value.
During a bearish market, there are often more sellers than buyers, leading to a downward trend in prices. This downward momentum can be driven by various factors including economic downturns, negative news, geopolitical tensions, or even regulatory changes. Investors, anticipating further decline in value, tend to sell their assets or refrain from investing.
The term "bearish" is derived from the behavior of a bear, which typically swipes its paws downwards to attack. This metaphorically represents the negative sentiment and downward trajectory associated with a bearish market.
In such a market, investors may adopt strategies like short-selling, which involves borrowing shares and selling them in the expectation of buying them back at a lower price later. Additionally, investors may choose to move their investments away from more volatile and risky assets towards more stable ones, such as bonds or cash.
Overall, a bearish market signifies a decline in market sentiment and can have a significant impact on investment portfolios and the overall economy.
Common Misspellings for BEARISH MARKET
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Etymology of BEARISH MARKET
The term "bearish market" comes from the world of finance and is rooted in the behavior and characteristics of a bear. The word "bearish" is derived from the noun "bear", which refers to a large, powerful mammal known for its aggression and tendency to attack by swiping its paws downward.
The use of "bearish" in finance dates back to the early 18th century in London, where it was used to describe stockbrokers who were selling stocks they did not yet own, in hopes of buying them at lower prices in the future. This practice became known as "selling bearskin before catching the bear" as an allegorical representation of trying to sell something you do not possess. The term "bear" was therefore linked to selling speculation and downward price movements.
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