What type of investor takes a position based on the belief that the market or a particular security will fall?

An investor who takes a position based on the belief that the market or a particular security will fall is described as bearish. This type of investor anticipates a decline in the prices of securities and may employ strategies such as short selling, where they sell securities they do not own in anticipation of buying them back at a lower price.

Being bearish involves a downward outlook on market conditions, and such investors often seek to profit from downturns. This contrasts with bullish investors, who expect prices to rise and typically look for investments that will perform well in an upmarket. Speculative investors may take on high-risk positions to earn high returns but their approach is not strictly confined to anticipating market declines. Similarly, value investors focus on identifying undervalued stocks and expecting them to increase in value over time, rather than betting against the market's overall trajectory. Thus, the bearish perspective specifically aligns with the notion of expecting and profiting from a market downturn.