Bull Market vs. Bear Market??

I know many of people who are new to investing and the stock market have heard the term “Bull Market” or “Bear Market” so what are they? its a pretty weird concept but once you see it then it will make sense.

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Bull Market

So if you have ever seen a video of a bull fight or a bull attacking something or you just know what a raging bull looks like. When bulls hit something the put their head down and swing it upwards to hit with their horns. That is the concept behind a bull market, in a bull market the market as a whole is in a upwards trend climbing more and more every day, Bull markets can last anywhere from 1.5 years to 8-10 years just depending on the general economy and how much investors like you and I as well as big corporation buy, the whole market moves on the buyers. During bull markets everyone is happy, everyone is making money (except the short sellers.) but its a good time.

You might also hear that a stock might have some “bullish behavior” or something along those lines, that just means that instead of the whole market, just that particular stock is in a constant upward trend and is advancing nicely.


Bear Market

On the other end of the stick you have “bear markets” and if you have ever seen a video of a bear attacking, they stand up on their back legs swat downward at you with their front paws. That is the concept behind a bear market, a bear market comes after a bull market it is when all the stocks have been doing good the past few year they are at all time highs they have never been this high, eventually investors are going to stop buying because it can only go high right? once everyone starts selling all the stocks start to fall, everyone that owns stocks are going to sell in order to get the most money out of their trades, that makes the stocks fall even farther. During bear markets Nobody is happy, everyone is losing money (except the short sellers.) overall its a bad time.

It is the same thing if you hear something like “Bearish Behavior” that means that the market or just individual stocks are trending downwards or showing signs of decreasing investors.

I generally tell when we are in a bear market from the rule I lose which is, if the S&P 500 or the Dow Jones Industrial Average (DJI) is falling for a consecutive 3 months that pretty much means a bear market is here. Other people have different guidelines but that is what I use to determine which market we are in.



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