What is a Bear Market in Stock and Shares?

A Bear market is when Stock Markets decline in value over a sustained period.

You often hear people talk about a Bull Market or a Bear Market, and these are similar but opposite terms. A Bear Market is when Stock Market prices decline by around 20% or more over a sustained period.

This can happen when there are problems with an economy, perhaps during a recession. The Global Financial Crisis of the late 2000s or the .com bubble bursting in the early 2000s are examples of this.

But why is it called a Bear Market? Well when a bear attacks you it swipes downwards with it paws. So the bear attacking downwards reflects the Stock Market heading downwards. This is of course the opposite of a Bull Market, where a bull attacks upwards with its horns!

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Why do Share prices go up and down?

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What are Dividends in Stocks and Shares?

A Dividend is simply a profit share. If you own Shares in a company, and the company is profitable, typically once a year they will transfer some money into your account, this is called a Dividend. This Dividend is your share of the company’s profits, and you can withdraw and spend it however you wish. Let’s imagine your neighbour Suzy wants to open a Lemonade Stand. She needs some investment to buy lemons, so being a shrewd investor, you offer to give her £100 in exchange for half her company (the Shares) and half of any profit she makes (the Dividend). Suzy has a busy week and sells lots of Lemonade, after buying enough Lemons for next week she is left with £20 of profit. She gives you £10 (the Dividend) and she keeps the other £10. You still own half her company, and you will keep receiving half of the profits every week. In large companies the Directors may decide not to pay all their profits in Dividends, instead choosing to reinvest to buy new machinery, or grow the business. B

What are Stocks and Shares for beginners?

To be honest it is quite acceptable to use the words Stocks and Shares interchangeably and nobody will bat an eyelid. In reality though, Shares represent a fraction of the companies Stock. But what does that really mean? Imagine Bitesized Money Inc is a bag of 100 marbles (the Stock), and everyone that owns one of the marbles owns 100 th of the company (a Share). They benefit when the company makes money, they collectively vote when big decisions need to be made, and they share the pain when the company loses money in hard times. In simple terms this is how Shares work, when you buy a Share, you are buying a part of a company. What should you pay for one of their marbles Shares? Well that is the tricky question and why investing is fun, but also carries some risk. Generally when a company is doing well, or people think it will do well in the future the price goes up, and when its future doesn’t look so good the price will go down. Company Shares are traded on a Stock Market, and pe

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