By Nick Gertsema
When I became an advisor, a good friend and colleague of mine got me a small statue of a bull taking down a bear. It was a thoughtful gift, the kind you might see regularly in a financial advisor’s office. The bull and the bear are symbolic of stock market trends.
Recently, someone noticed the statue and asked a question I had never thought about, “Why do a bull and bear signify the markets?”
A quick Google search brought me the usual barrage of theories, but I finally found there are two basic stories on the origin of the iconic bear and bull.
Theory one is pretty cut and dry. A bear swipes downward with its giant paws in a fight and knocks its opponent to the ground. A bull tosses its assailant into the air, as anyone who has seen bull-fighting or the running of the bulls can attest. So, the bear swipes down, therefore signifying a market that is heading down and the bull tosses up like a rising market.
The other theory discusses the term bear first, which predates the bull and has an origin in the early 1700s. The old adage, “Don’t sell the bearskin before you’ve killed the bear” birthed the term “bearskin jobber” – the slur for people who sold things that had no value. This was shortened to “bear,” which describes someone who tries to turn a quick buck before people realize what they’re being sold is worth less than they paid.
A while later, the term “bull” appeared. Bull described someone who bought something for less than they thought it was worth because they felt the value would increase. Their headstrong beliefs and push-forward attitude were like a bull charging – hence the name. The bear and the bull became associated with the markets quickly and stuck as symbols of market trends.
Be Ready for Both!
I’m not sure which theory I believe, but what I do believe is that you need to be prepared to take advantage of both markets. If you’re too paranoid about the bear market, you may miss the bull. If you’re overconfident of a bull market, you may take unnecessary risks and lose what you’ve earned. Legendary British investor Sir John Templeton described the markets with a refreshing reality, “There will always be bull markets followed by bear markets followed by bull markets.” In other words, watch closely and don’t assume tomorrow will be exactly like today. Our risk assessment survey will help you determine your investing style, and how best to handle the bulls and bears that come your way. Let’s get together and talk about a long-term plan that works with your style and prepares you for the future.