Bull vs Bear Market
Markets move in long waves of optimism and pessimism. Knowing which one you're in helps you set expectations, size positions and avoid fighting the trend.
Bull market
A bull market is a long period of rising prices, commonly defined as a 20% rise from a recent low. Confidence is high and investors expect further gains.
- Prices make higher highs and higher lows
- Strong company earnings and economic growth
- More stocks rising than falling
- Pullbacks get bought quickly
Bear market
A bear market is a long period of falling prices, commonly defined as a 20% decline from a recent high. Fear dominates and investors expect further losses.
- Prices make lower highs and lower lows
- Weakening earnings or economic slowdown
- More stocks falling than rising
- Rallies fade quickly
Bull vs bear at a glance
| Bull market | Bear market | |
|---|---|---|
| Direction | Rising | Falling |
| Common definition | +20% from a low | −20% from a high |
| Investor mood | Optimism, greed | Pessimism, fear |
| Economy | Usually growing | Often slowing or in recession |
| What works | Buying dips, holding winners | Protecting capital, raising cash, quality stocks |
Correction, rally and crash
- Correction: a drop of 10–20% from a recent high. Corrections are normal inside bull markets.
- Bear market rally: a sharp bounce inside a bear market that later fails.
- Crash: a very sudden, steep fall over days rather than months.
Where the names come from
A bull strikes upward with its horns; a bear swipes downward with its paws. The images match the direction of the market.
How to invest in a bull market
- Stay invested and let winners run
- Buy pullbacks to support or moving averages
- Avoid over-confidence and excessive leverage
- Rebalance as stocks grow to a bigger share of your portfolio
How to invest in a bear market
- Keep investing regularly if your horizon is long
- Favour quality companies with strong balance sheets
- Use smaller positions and tighter risk control for trades
- Don't panic-sell: bear markets have always ended
Educational information only, not investment advice. Market data may be delayed.
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