Rational Advisor

Here are some terms that people have asked me about

Beginner’s glossary

Bear

Describing someone as bearish does not mean they are large and hairy, but that they have a cautious and conservative outlook, and are more inclined to be pessimistic. A bear market is characterised by falling share prices and poor returns. Bear times are bad times

Bull market

Share prices are consistently rising. Think “bull in a china shop” – excited, but potentially dangerous

Bear market

Share prices are consistently falling. Think bear with a sore head – just sort of grumpy

Credit crunch

With all this free publicity it could become the name of a biscuit snack. But it refers to the seizure in the money markets caused by the fallout from US sub-prime mortgage customers defaulting on their loan payments. Big banks refused to lend each other money and while some banks hoarded their cash, others were left exposed without enough cash in their pocket. Think Northern Rock

Growth recession
Not male pattern baldness, but very slow economic growth, which can have a similar effect on consumers as a recession

Sub-prime mortgages
Home loans granted to people with troubled credit histories. Those who have missed a few credit card payments are classed as “light” sub-prime, while others who have become bankrupt in the past or who have court judgments against their name for nonpayments of debts are “heavy” sub-prime

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