Bull Markets vs Bear Markets: The Differences Explained

Bull Markets vs Bear Markets: The Differences Explained

Bull and Bear Market: Definition & Difference

These include an increase in trading volume, as more investors are willing to buy and hold onto securities in the hopes of realizing capital gains. Securities in a bull market also tend to receive higher valuations, as investors are willing to pay more for them due Bull and Bear Market: Definition & Difference to the perceived potential for price appreciation. There is no specific and universal metric used to identify a bull market. Nonetheless, perhaps the most common definition of a bull market is a situation in which stock prices rise by 20% or more from recent lows.

Bull and Bear Market: Definition & Difference

We don’t care what your motivation is to get training in the stock market. If it’s money and wealth for material things, money to travel and build memories, or paying for your child’s education, it’s all good. We know that you’ll walk away from a stronger, more confident, and street-wise trader. When unemployment is low and the GDP is strong companies see a rise in profits. If the market rises, say, another 10 percent in the next month, putting us squarely in bull market territory by any definition, I’ll be richer now.

A Bull or a Bear Market? It Doesn’t Matter.

Since 1945, the National Bureau of Economic Research (NBER) identified 13 recessions, and there have been 13 bear markets, says Stovall. Market researchers define a bear market as when prices fall 20% from a recent high. Stock indexes such as the S&P 500 or the Dow Jones Industrial Average (DJIA) can fall into bear-market territory and individual stocks can also slip into bearish behavior.

The market run-up before the bubble burst was not, however, uninterrupted. Several Asian countries experienced financial crises in late 1997. Market watchers generally include 1990’s setback among the modern full-fledged bear markets. In 1966, the Vietnam War was escalating, interest rates were rapidly rising, Americans were struggling with inflation and investors were concerned about the possibility of a global recession.

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A bull market is a financial market characterized by rising prices and investor optimism. It is most commonly used to refer to the stock market, but can also refer to the bond, real estate, currency, and commodity markets. Bull markets tend to last for https://www.bigshotrading.info/ extended periods of time and are marked by increased demand for securities, rising corporate profits and GDP, and declining unemployment. The opposite of a bull market is a bear market, which is characterized by falling prices and investor pessimism.

Here’s what you need to know about bull and bear markets, including key differences between them. That said, if you’re particularly concerned about stock market returns in retirement, you might opt for withdrawing only 3% of your portfolio. A financial advisor or tax expert can help you figure out the right withdrawal rate for your assets and risk tolerance.


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