The Bull vs. The Bear

Jono Bruton is one of our close associates at CN&CO. He’s the founder of the – awesome!! – Dead Reckoning clothing brand, as well as the Salty Hour surfing initiative in East London (which was recently featured in Khuluma, the in-flight magazine for kulula.com). A keen surfer, Jono recently started investing with EasyEquities and draws some strong parallels between surfing and investing.

During office hours Jono works at a long-term insurance brokerage, although we hear his passion for investing might lead him to join a certain client of ours in the near future. In preparation for this alleged move, he’s started boning up on the lingo used in the markets. Here’s what he has to say on bulls and bears:

I started investing in shares through www.easyequities.co.za about a year ago. Being a total novice to investing I was unsure of which company to buy shares in and when the best time to buy the shares in my favourite brands would be.

Hearing terms like “Bullish” and “Bearish” had me like “WTF??”… so I did a bit of quick reading. For those of you who share my (lack of) understanding around these terms, here’s my take on them:

A Bull Market

Think of a bull like those huge-ass ones you see on YouTube running through the streets of Spain, throwing their horned heads around wildly as they’re herded into the bull ring. They’re just going for it … literally on a run.

In its most basic sense, a bull market is positivity in the market and describes an upward trend among a specific market or group of securities that is rising in value or is expected to rise in value in the future. Bull markets are usually led by general optimism, upbeat expectations and investor confidence.

A Bear Market

Think of a grumpy old bear hibernating in its cave for the winter, waiting for the warmth to return before venturing out into the world again. 

Conversely to a bull market, a bear market shows a downward market trend over time. In these cases, markets are seen to be “in hibernation” and the prices of assets in these markets are either in decline or expected to be in decline in the future.

In bear markets, increasing pessimism and decreasing investor confidence are the prevailing psychological determinants of these trends.

Bull and bear markets are medium- to long-term phenomena. Sudden dips in a bull market, for example, don’t necessarily represent the start of a bear market, because stocks could recover quite quickly… or not – it all depends on the market.

So if you didn’t know, now you do 🙂

Be it a bull or bear market, the most important thing I’ve learnt since I started my investment journey is that there’s no wrong time to invest if you’re in it for the long run. Over time, equities deliver the best returns of any asset class. (The other main asset classes are bonds and cash.)

So if you haven’t started investing in equities yet, remember this: it’s never too early, it’s never too late – and now it’s easier than it’s ever been.

Check out Easy Equities and start investing from as little as R5!