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Definition

<p style="text-align: justify;">The <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">sentiment</span> in the <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">market</span> at any given time - which can be either <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">bullish</span> or <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">bearish</span>. <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">Investors</span> as a group tend to respond to the algebraic sum of a multitude of economic factors such as the level of <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">interest rates</span>, the <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">balance of payments</span>, the state of the <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">business cycle</span> and the level of <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">inflation</span>. They anticipate where the economy will be in the future and make their <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">investment</span> decisions based on that. Their sentiment has the effect of shifting <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">supply</span> and <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">demand</span> for <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">shares</span> in the market. In a <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">bull market</span>, 80% of investors believe that the market will continue to go up and only 20% are <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">bearish</span>. The opposite is true in a <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">bear market</span>. Market forces are sometimes referred to as <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">systematic factors</span> which influence the market as a whole. <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">Unsystematic</span> factors pertain to individual <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">companies</span>.</p>