A bear is someone who generally believes a market, or an asset will go down and is the opposite of a bull. A bear would typically short a stock, selling it now but purchasing it in the future as they believe it will be lower and thereby making money on a contracting market. It is possible to be a bear, or ‘bearish’ with regard to one specific asset or asset class rather than being bearish on the market as a whole.
For example, you might be bearish on the dollar, believing it could lose value because of events such as a trade war. Conversely you might therefore be ‘bullish’ on gold because you believe more people will buy gold as the dollar depreciates and they want to put their money into something they see as a safe store of value.
Click here to find out where the terms ‘bear’ and ‘bull’ originated from in finance.
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