A bear investor generally has a pessimistic view regarding the outlook of the financial market and economy and will usually utilize a much more conservative or even "short" investment strategy. Bearish investors--investors that believe a certain asset or market will decline--can exist in any type of investment class such as stocks, bonds, commodities or real estate.

Investors in Bear Markets

Investors that believe a certain asset, security or market is going to decline can adopt investment strategies that provide both capital preservation as well as the opportunity to profit from falling prices. Bearish investors typically utilize investment strategies like shorting stocks, or rotating portfolios into more defensive equities to profit from declining prices.

Bullish and Bearish Markets

A bull market is a market where the prices are rising and a bear market is a market where the prices are falling. Those two terms are actually used to describe the different types of investors, as well, and offer a broad-spectrum feeling of just how the market is faring. Investors, as well as the media, frequently utilize terminology like bull market and bear market. Sometimes, a financial panic, produced by ominous predictions by the media regarding the market, can also initiate bear market conditions.