Bull vs Bear Market

Bull and bear markets are common terms in the world of finance, representing different market conditions. A bull market occurs when stock prices rise by at least 20% from the previous market low, signaling investor optimism and confidence. Just like a bull pointing its horns upwards, a bullish investor expects a positive progression in the market. In contrast, a bear market begins when stock prices fall by 20% or more from their peak, indicating pessimism and uncertainty. When a bear attacks, it brings its pawn downwards, which is translated as a declining market in finance. Although the 20% rule is a more general and technical threshold for investor sentiment, other indicators such as variations in GDP, interest rates and inflation can help evaluate the market’s outlook.