Market Volatility In Perspective
Firstly, what is a “bull” and what is a “bear”?
As a nice simple analogy, bulls toss things into the air with their horns, while bears drag their prey down. So, one can deduce that a bull market is one that is expected to go UP and a bear market is expected to go DOWN.
Although no one can reliably predict the timing of bear markets or bull markets, a prudent investor should understand that equity prices can decline and be prepared to “ride out” these periods when they occur. The big danger from bear markets is that an investor will sell at or near the bottom of the downturn. Unfortunately, much of the material presented in the press is often there to try and “talk” a market up (create a bull market) when, in fact, a bear market is looming on the horizon.