What’s a bear market? An economist explains

   A 16th-century proverb advises: “It’s unwise to sell a bear’s skin before catching it.”

  That’s one of the stories used to explain why, in modern times, Wall Street types call someone who sells a stock expecting its price to drop a “bear.” It follows that a market in which securities or commodities are persistently declining in value is known as a “bear market,” like the one U.S. stocks are experiencing now.

A coronavirus recession may be coming: Here’s what to do with your money

  Global markets are crashing, the price of oil is plummeting, and even entire countries are in lockdown. The odds of a recession due to the new coronavirus outbreak are rising every day.

  A question I’m often asked as a finance professor and a CFA charterholder is what should people do with their money when the economy is slowing or in a recession, which typically causes riskier assets like stocks to decline. Fear causes many people to run for the hills.

Sheldon Richman: The Dow Jones is lying

  The Dow Jones Industrial Average (DJIA) is at a record high, and the unemployment rate has ticked down to 7.7 percent, but this is no time to celebrate. The economy is still in the doldrums.

  A little perspective: The news media trumpet changes in the Dow as though it tells us almost all we need to know about the economic fate of the American people. That’s nonsense. Not everyone thinks the arbitrary index of 30 busily traded blue-chip stocks is terribly relevant to gauging the condition of the economy. Moreover, the average, which reflects the daily change in the companies’ stock prices, is not adjusted for inflation. In nominal terms the Dow hit a record high of 14,447.29 this month. But in real adjusted terms, the average is only at the level reached in the year 2000. In other words, if you invested in the companies that year, you’re no richer now, because the dollar has depreciated thanks to the Federal Reserve. That doesn’t sound so remarkable.