What Two Animals Represent the Stock Market?

These two animals have become icons of the stock market.

The bull and the bear are iconic animal representatives of the stock market. The terms "bullish" and "bearish" have become so pervasive in the language used to describe traders, markets and even commentators, that it's hard to imagine a financial conversation where they're not used. There's even a famous statue of a bull that's one of the sights of Wall Street.

The Bull

The bull represents a rising, optimistic market, where stocks are forging ahead. That's likely because a bull is perceived as a bold, decisive and aggressive animal. If you're feeling good about your investments, you'll be described as "bullish." A bull market is one where stocks have continued to rise faster than their historical average for a sustained period of time.

The Bear

The bear is seen as a more cautious, slow moving and inactive animal, and hence a bear market is one that's falling, where traders are keener on selling off their positions, and are feeling conservative. The term "bearish" is applied to someone who lacks confidence in the market, and is selling or staying on the sidelines.

Alternative Theories

Although the animals' personalities are most often used to justify which markets they represent, there are plenty of other theories. The Motley Fool says a common myth is that a bull market is one that's rising because a bull tosses its horns upwards when attacking. A bear conversely, swats downwards with its paw when approaching prey, hence the downward moving market term.

The History

It's not 100 percent clear when these animals first became associated with stock trading, but the Oxford English Dictionary traces the term "bull market" back as far as 1891. "Bear" may date back even further to the days of the South Sea Bubble in the 18th Century, when according to the Wall Street Journal's Live Mint, fraudulent traders were described as people who "sold bear-skin before they'd caught the bear," a fair description these days of short sellers, who make money betting that the market will go down.

The Third Animal

One more animal makes a very telling appearance in an old Wall Street adage. The saying goes, "bulls make money, bears make money, but pigs get slaughtered." Roughly translated it means if you're skilled you can make money in any market, but if you get greedy, you'll lose.

references