Bull and Bear Markets

Bull Markets:

The broad definition of a bull market is a continuous period where prices rise. The term is used for the stock market, real estate, commodities, or foreign currencies. A bull market in financial markets is mainly when the stock prices on major market indexes, like Nasdaq 100, Dow Jones Industrial Average, commodities like crude oil and gas, rise from a recent low. Bull market refers to a strong economy and low unemployment rates. Bull markets give rise to bullish sentiments; investors show confidence and invest in securities.

Bear Markets:

The broad definition of a bear market is a continuous period where prices fall. The term is used for the stock market, real estate, commodities, or foreign currencies. A bear market in financial markets is mainly when the stock prices on major market indexes, like Nasdaq 100, Dow Jones Industrial Average, fall from a recent high. A bear market is usually caused by the slow economy and rising unemployment rates. When the markets are bearish, investors tend to sell-off their investment to safeguard their money and more likely move their investment to more conservative securities.

When we compare between bull and bear markets, bull markets can last for a few months to several years, but they tend to be longer than bear markets. They also tend to be more frequent: Bull markets have occurred for 78% of the past 91 years.

Bull and Bear Markets