If you’ve ever looked at your EasyEquities dashboard and wondered why things suddenly went redder than a Valentine’s Day bouquet, chances are you’ve stumbled into a bear market, and no, not the kind you find at Kruger.
The stock market comes with its own zoo: bulls, bears, and sometimes a few political turkeys. But if you want to start investing smartly instead of wildly guessing what a candlestick chart is, you’ve got to get the basics right. So let’s break down three terms that pop up more than Eskom excuses: bull markets, bear markets, market cap, and volatility.
What is a Bull Market?
Let’s start with the good vibes. A bull market is when stock prices are going up, usually by 20% or more over a sustained period. Everyone is happy, confident, and convinced they’re a financial genius. It’s like when the Springboks win and suddenly, everyone’s an expert.
In a bull market, there’s optimism in the air, money flowing into stocks, and a general belief that things are looking up. Even your cousin who once blew his student loan on Bitcoin is back giving investment advice.
What is a Bear Market?
Now for the hangover. A bear market is when prices drop by 20% or more and panic starts setting in. Investors pull their money out, headlines scream “Meltdown!”, and WhatsApp groups fill up with messages like “Should I sell everything?”
In South Africa, bear markets often come wrapped in load shedding, political drama, or global economic spats. It’s like being stuck in a Joburg traffic jam during a taxi protest. You know it’s going to be painful, but you just hope it ends soon.
Bear markets can feel bleak, but they also offer buying opportunities if you’re in it for the long game. The secret is not to panic-sell like you’re at a Black Friday fire drill.
What is Market Cap?
Market capitalisation, or market cap, is basically a company’s size, measured in money. You take the share price and multiply it by the number of shares available.
Why should you care? Because market cap tells you if you’re investing in a big, stable juggernaut or a small, scrappy underdog.
In South Africa, we broadly group companies into:
Large-cap: These are the Bafana Bafana of the JSE. Big, known names like Naspers, Anglo American, and MTN. They don’t move fast, but they’re usually less risky.
Mid-cap: Not quite household names, but still solid — like the biltong shop that’s been around since ’98.
Small-cap: These are high-risk, high-reward. They might take off or fall flat. Investing here is like trying a new curry spot. It might change your life or your stomach lining.
Market cap helps you diversify and balance risk. Too much in small caps? You’re gambling. Too much in large caps? You might miss out on growth.
What is Volatility?
Volatility is the market’s version of mood swings. It measures how wildly a stock or index moves up and down.
High volatility means prices are unpredictable. One day up, the next day down, like an overworked geyser. Low volatility means smoother, steadier movement — think of your gran’s driving compared to your teenage nephew’s.
South African markets are naturally more volatile than US or European markets. The rand is moody, political news moves markets overnight, and the economy likes to keep us guessing. Volatility isn’t always bad though. It just means you need to be emotionally prepared for the ride.
If you’re constantly refreshing your portfolio like it’s your ex’s Instagram, you might want to focus on lower-volatility stocks or ETFs.
Why These Terms Actually Matter
Here’s the truth. If you understand these three concepts, you’re already ahead of most casual investors.
Bull and bear markets help you make sense of the big picture.
Market cap lets you assess how “big” or stable a company is before throwing money at it.
Volatility helps you manage your expectations and emotions when prices start jumping like petrol costs.
Learning this isn’t about sounding smart. It’s about being able to invest with intention, not panic.
Stokvel Starter Pack of Stock Lingo: Volume 2
Bull Market: Prices are rising, optimism is high, everyone’s flexing their “green portfolio” screenshots
Bear Market: Prices are falling, people panic-sell, and you start questioning your life choices
Market Cap: The total value of a company. Large-cap = stable, small-cap = spicy
Volatility: How much a share or index bounces around. High = drama, low = nap-friendly
Next time you see someone post about “the market being moody,” you’ll know exactly what they mean. And maybe, just maybe, you’ll sound like the clever one at the braai.
DisclaimerWhile my jokes may be spicier than a bunny chow in Durban, remember:
This is not financial advice. Do your own research, chat to a licensed advisor.