The Stock Market – Becoming Familiar With the ‘Animals’

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The stock market is the economic backbone of the American economy. Shares or quotations of securities are traded daily via stock exchanges or open markets.

The stock market – often called the stock market – is the engine of the U.S. economy, serving as the key to many companies' fundraising or capital infusion strategies.

The market is divided into two main sectors, the primary and secondary market. New stocks are first offered on the primary market. Subsequent trading of the same shares takes place on the secondary market.

Animal breeds are used to describe general market behavior, from bulls to chickens. These animal classifications are often used to differentiate between situations and people who affect the market.

The bull market

A bull market occurs when people have capital to buy consumer products – both inventories and gross domestic product (GDP) are on the rise.

During the bull markets, most stock prices go up. This may be the perfect time to buy cheap stock and make a profit by selling it later.

While bull markets are the perfect time to start investing, they just don't last forever. Finally, stocks become overvalued and quickly cause the market to slow down.

The nomenclature of bulls has left the corridors of Wall Street and is often used in the public domain. People who believe that the market is strong and in times of recovery will often be called bulls.

The bear market

As mentioned above, when the market is going up, it is called the bull market. However, when it steadily heads in the opposite direction, it is a bear market. Bear markets are tough times for average investors to buy stocks that will generate profits.

During bear markets, many brokers use alternative techniques such as "short selling" to make money.

Another strategy that tends to prevail in a bear market is to wait for the negative side and hope for a return from the bull market. Investors who believe the market is starting to deteriorate are often called bears.

Prudent investor

Prudent investors are often called chickens. Chickens are afraid of losing money and often only invest in money markets, or stop investing all together.

The big loser

Investors who like high risk stocks and are not afraid of losing money are called pigs. Hogs are often the most profitable investors for stockbrokers. They often look for "high score" stocks, stocks which they hope will have high returns. These people often invest without doing extensive research and can lose significant amounts if their investments turn sour.

With all the animals associated with the stock market, it can be difficult to differentiate Wall Street from the Bronx Zoo.


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