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The Psychology of Money: Are You a Bull or a Bear? (And the Timing of the Market)

February 29, 2024


What you heard at the top of the stairs when you were a kid is the most significant determinant in how you feel about money. The first lesson in money comes from your parents–your hopes, your fears, your aspirations, and what you define as possible and impossible.

As we get older, we start to acquire our own experiences, developing a relationship with money. These experiences shape and shadow the beliefs that our parents instilled. Is money scarce or abundant? The answer depends on if you know how to make or attract wealth. If you do not know how to make money, you will always be afraid of losing it because you have no idea how it appeared.

When you can step back and observe your beliefs about money and separate yourself from what has happened to you, you can start to make rational decisions about money. Otherwise, you risk being trapped in a cycle of old news.

Before investing in anything, you need to honestly determine and accept whether you are a bull or a bear. Bulls look at the stock market, see the upward trend over time, and say to themselves – “stocks eventually go up”. Conversely, bears look at stocks and see the sharp short declines from one moment to the next and say to themselves “the market always crashes”.

It is similar to asking yourself if you are pessimistic or optimistic. This is a harder question to ask oneself as most people wish they were optimistic. Pay attention to the thoughts you are feeding yourself. If you tend to think this isn’t going to work, the stop light always turns red, and the light bulb will always burn out.  You are pessimistic.

This is not a judgment. Sometimes the lights are red! The markets do go down. That is what they do. If you never want the value of your investments to go down, then don’t buy stocks. If you think that stocks go down, and instead you buy real estate thinking it never goes down, then you are fooling yourself. This would make you a bear in stocks and a bull in real estate.

In investing you can make a profit in either direction, long or short. Short is a strategy that lets you profit from the decline in the value of an investment. Going long lets you profit if the value goes up. Both are perfectly acceptable ways of investing and are realistic representations of what is happening. Everything is in flux and oscillating up and down. Yes! That is correct you can even profit in markets that are going sideways.

The Market wizards are those who can do both. We are a few of us, hard to find, and it requires a lot of practice and discipline to profit from the long and short side of the market. For example, short selling is riskier than buying long. The way to use short selling is through:

1.      Diversification

2.    Rotation

3.    Rebalancing

For more on the different ways of investing and your free report on purchasing insured individual bonds send an email to me at or book your free 30-minute consultation.