Bear And Bull Meaning

Forex Trading

Bear And Bull Meaning


south sea bubble believe that this trend will continue, and it prolongs the downward spiral. In this phase, there is slowdown and increased unemployment levels. The difference between a bear market and a bull market is the direction of prices and the general success or health of the market. Simply put, it’s a bull market when prices are going up, and it’s a bear market when prices are going down. More specifically, however, a bear market describes any stock index or individual stock that drops 20% or more from its recent highs.

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When the market prices are increasing and are expected to continue to increase, it is referred to as a bull market. This is in contrast to a bear market, during which market prices fall. These markets get their names from how the animals that they are named after attack. Bull markets occur during periods of low unemployment, low inflation, and a booming economy. As a newer asset class that’s in many ways distinct from traditional investments, the causes of a crypto bull market are somewhat different.

Is crypto in a bear market right now?

If the market is making you uneasy, consider diversifying the mix of assets you hold, rather than selling. Staying the course and spreading your risk across asset types could make sharp swings easier to handle. “Decide on an asset mix that’s right for your goals and risk tolerance—not based on what the market has done or what you think it’s going to do—and stick to it,” says Tolomay. In the past 92 years, there have been 21 bear markets in the S&P 500 prior to the current one, according to Yardeni Research. The shortest bear market was just 32 days and occurred at the start of the Covid-19 pandemic in early 2020. The longest bear market in history will depend on how you define a bear market and the data being considered.

The longest bear market in history ended in March 1942, lasted 61 months, and cut the S&P 500 Index by 61%. By and large, investors look for a 20% gain from a low point and steady gains over at least a six-month period to understand when a bear market has ended. Asset ClassAssets are classified into various classes based on their type, purpose, or the basis of return or markets.

A rising unemployment rate tends to prolong a bear market since fewer people earning wages results in reduced revenues for many companies. In addition, investors may benefit from taking a short position in a bear market and profiting from falling prices. There are several ways to achieve this including short selling, buying inverse exchange-traded funds , or buying put options. In a bull market, there is strong demand and weak supply for securities.

investor sentiment

A bearish market is when the performance of the market is on the decline. Optimism characterizes bullish people, markets and actions, while pessimism characterizes bearishness. To say a trader is “bearish on stocks” means they believe the price of stocks will decline in value. A bull market is when an investment’s price is rising—called an uptrend—typically over a sustained period, such as months or years. One way to handle your portfolio during either a bull or bear market is with a free investment calculator. Such a tool can help limit the role of emotion in your investment decisions.

Trading Up-Close: Bear Markets & Bull Traps

We provide the trading development platform that enables you to learn to trade, analyse your performance and apply insights to upgrade your potential. Overall, if you notice, the value of ICICI Bank’s share has progressed gradually to remain in the range of 500+ levels over a year because of its strong fundamentals. So, this is the fruit which you got for taking the opportunity if you had bought in 2017. Needs to review the security of your connection before proceeding. The Structured Query Language comprises several different data types that allow it to store different types of information… How to Invest $1,000 Four figures can produce some great returns if invested in the right places. market and bear market are terms frequently used to describe the ups and downs of the stock market. A bullish market represents rising stock prices, as it symbolically charges ahead with confidence. Conversely, a bearish market represents declining stock prices, as it symbolically retreats down into hibernation.

In the end, an investor would have lost all his money because the stock was delisted on May 30, 2018. This is a classic example of a risky proposition which resulted in a permanent loss because fundamental details of the company were ignored at the time of investing in it. Ideally, an investor should have checked if there was value or not in the stock before buying. A bull and bear market phase occurs due to various economic factors. Historically, it is seen that both phases occur one after the other, in alternation. During a bear phase, the prices fall, and everything declines, leading to a downward trend.


This movement is metaphorically the characteristic of the market condition. If it moves up, it is considered a market that is charging ahead and when it moves down it is a market that is dragged down. Typically, it is seen that the country’s economy is strong and employment levels are high during this phase of the market. Extrapolating to the current market situation, the Nifty 50; Nifty Midcap 150 and Nifty Small cap 250 have declined 14.5%, 17.7% and 18.0%, respectively, from their October 2021 high to May 2022 lows. This indicates that Indian markets are not yet in the grip of a bear market. Market experts, on the other hand, believe that given the current geopolitical environment and macroeconomic factors, we may witness a further decline.

  • It then eventually transferred to the general belief that prices will rise.
  • The price of Bitcoin surged from $1,000 in January to over $17,700 by the end of the year.
  • Your financial situation is unique and the products and services we review may not be right for your circumstances.
  • The stock of Kingfisher airlines in 2006 was at INR 76 and later in 2007 it reached its peak of INR 300+ only to fall drastically and never recover.
  • The Charles Schwab Corporation provides a full range of brokerage, banking and financial advisory services through its operating subsidiaries.
  • Because the market’s behavior is impacted and determined by how individuals perceive and react to its behavior, investor psychology and sentiment affect whether the market will rise or fall.

However, while literature contains numerous references to bulls throughout Western canon, etymologists have found little sound evidence for this specific theory in any historical record. This video is made available for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned may not be suitable for everyone. If you see an angry bull or a bear headed your way, you probably don’t want to stick around to see why it’s coming after you. These formidable animals could cause serious damage, but referencing these animals has a completely different meaning when it comes to the stock market.

On the contrary, in a bear market, the demand is significantly lower than supply as more people are looking to sell than buy. Although a bull market or a bear market condition is marked by the direction of stock prices, there are some accompanying characteristics that investors should be aware of. In the investing world, the terms “bull” and “bear” are frequently used to refer to market conditions. These terms describe how stock markets are doing in general—that is, whether they are appreciating or depreciating in value. And as an investor, the direction of the market is a major force that has a huge impact on your portfolio. So, it’s important to understand how each of these market conditions may impact your investments.

The investing information provided on this page is for educational purposes only. NerdWallet does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments. A bear marketoccurs when an investment’s price is falling—called a downtrend—typically over a sustained period such as months or years.

In the Graph 1 given below, the factors that have led to the bull and bear phases in the last 22 years from January 2000 till May 2022 have been highlighted. During the period, at a few instances, the markets were steady. At the beginning of the period from Jan 2000 till May 2003 and after that from September 2010 till September 2013, the markets did not show any trend. It is observed that bull phases last longer than bear phases, over a long-term trend. Over 22 years, there have been five instances of bullish trend as compared to three instances of bearish trends. In this article, we’ll explain bull markets and bear markets, the differences between them, and what they mean for everyone—not just stock traders.

“Bull Market” vs. “Bear Market”: What Do These Financial Terms Mean For Your Wallet?

Unlike a bear market, there is no universally accepted percentage gauge for how much a market has to rise before it qualifies as a bull market. The longest bull market in American history for stocks lasted for 4,494 days and ran from December 1987 to March 2000. Stocks went through a quick but sharp bear market in March and April 2020 due to the coronavirus pandemic. However, by July of the same year, the stock market looked bullish and continued to recover during 2021. Since entering that bull market, stock prices have not dropped by 20% or more from a recent high. This might point to a lack of bearish sentiment in the market as of early 2022.

Consider talking with a financial advisor who can help you understand if an investment decision or strategy is based on emotions or something more objective. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now. By contrast, under this theory, a bear market refers to how a bear will swipe downward with its paw.

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