Bull and Bear Markets
A bull market is a long period of rising prices. A bear market is a fall of 20 percent or more from a recent high.
Why this matters for beginners
Understanding this helps you stay calm and read price moves correctly. This is general education, not personal advice.
Main explanation
Bulls attack upward with their horns, bears swipe downward with their paws. That is where the names come from.
Historically, bull markets have lasted much longer than bear markets.
Bear markets feel endless while you are in one, but broad markets have recovered from every one so far, sometimes after years.
Nobody reliably knows when one ends and the next starts.
Example using a real company
The S&P 500 fell about 34 percent in early 2020, then reached new highs within months.
- →Index from 1,000 to 780: a 22 percent fall, a bear market.
- →Index from 780 to 1,200 over three years: a bull market.
Common beginner mistakes
- ✕Assuming a bear market will never end.
- ✕Assuming a bull market will never end.
Key terms
- Bull market
- A long period of rising prices.
- Bear market
- A fall of 20 percent or more from a recent high.
Key takeaways
- 01Both phases are normal.
- 02Timing the switch is very hard.
Check yourself
- 01What fall usually defines a bear market?
- 02Which has historically lasted longer?
- 03Can anyone reliably predict when a bear market ends?
Try the concept on a real company
Open a large company in the Analyzer and read how it held up in tougher years.
Educational examples only. Not buy or sell recommendations.