Bearish Definition
When most people think of bears, they think of large, lumbering animals that are cute but dangerous. However, in the world of finance, a bearish investor is someone who believes that a stock or the overall market will go down in price.
Bearish investors may be reacting to news events that have caused them to lose confidence in a company or the economy as a whole. For example, if there is news of layoffs or poor earnings reports, a bearish investor would bet that the stock price will go down.
There are a few different ways to be bearish on an investment. One way is to short sell the security, which means selling it now and hoping to buy it back at a lower price later. Another way is to buy put options, which give you the right to sell shares at a certain price by a certain date.
If you’re thinking about investing in something but you’re not sure if it’s going to go up or down in value, you can always take a wait-and-see approach. But if you’re feeling confident that the price will fall, then being bearish could pay off for you in the long run.
