Let's learn some terms

Today "Bearish"

Hello, hello! How are you? We will try daily to explain some terms that you might read in passing and really don't know. Today we will start with the simple "Bearish"

In the market, "bearish" (or "bajista" in Spanish) refers to an attitude or condition in which asset prices are expected to decline.

If someone is "bearish" (or a "bear"), they believe that the price of a stock, a sector, an entire market, or even a financial instrument is going to fall. They are pessimistic about the future direction of prices.

A bear market is a prolonged period in which asset prices (especially stocks) are in constant decline. Generally, it is considered a bear market when a major market index falls by 20% or more from its recent highs.

And why the analogy with the Bear? Well, it is said to come from the way a bear attacks, striking its paws downward, which would symbolize the fall in prices (Strange, I know, but these analogies have their age, I can imagine when bears were roaming Wall Street or whatever...)

This is contrary to "bullish," which would resemble a bull charging upward, meaning that prices are rising.

Now why is this market considered "bearish" as we have read lately... Well, it has to do with economic concerns, interest rates that are not adjusting (as has happened this week despite Trump's protests), or high unemployment. The geopolitical situation also has its place, given the Israeli bombing of Iran.

In short, if a market is Bearish, it has a negative, pessimistic outlook. This is not necessarily a bad thing for the intelligent investor:

Investors often look for ways to profit from these declines, for example, through short selling. I will talk about that in another post. Follow me and share!

Adrian Hermógenes

Internationalist