What are Bull and Bear Markets?

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DEFINITION:
Bull markets describe a period of growth for a stock, an industry, entire markets, while bear markets reflect a decline.

Understanding bull and/or bear markets

Appreciate investors a good animal mascot? Looks like. Bull and bear markets are important terms and symbols for investors, expressing positive (bull) or negative (bear) feelings. There’s no official rule, but a bull market usually refers to a 20% increase in the market from the low, while a bear market means a 20% decrease from the high. In general, the positive term “bull” or the negative term “bear” can refer to upward or downward movements in almost anything, such as individual stocks. You may even find investors saying they’re “bullish” on an industry with growth potential or “bearish” on a stock they believe will fall.

EXAMPLE
Fuelled by the first wave of the Internet boom, the 1990s became a famous bull market – the S&P 500 stock index rose 418% from October 1990 to March 2000 before falling. Then came the bear market, and the S&P 500 fell 40% by September 2002.

Takeaway

Bull and bear markets are like the emojis of investing…
These are simplified terms that describe market movements up or down over time. You’ll find that the meaning of the words has expanded to capture the general sentiment of stocks, markets, industries, or even just the optimistic or pessimistic feelings of investors.

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