Bull vs Bear Markets

Market Moods: Bulls and Bears

You will hear investors talk about "bull" and "bear" markets. These terms describe the overall direction and mood of the market.

Bull Market

A bull market is when stock prices are rising over a sustained period (generally 20%+ from recent lows). Investors are optimistic, the economy is growing, and confidence is high.

Bear Market

A bear market is when stock prices fall 20% or more from recent highs. Investors are fearful, economic conditions may be deteriorating, and selling pressure dominates.

How to Think About It

• Bull markets can make you feel like a genius — everything goes up. The risk is getting overconfident.
• Bear markets can feel scary, but they create opportunities to buy quality stocks at lower prices.
• Time in the market beats timing the market — Trying to predict tops and bottoms is extremely difficult even for professionals.

"Be fearful when others are greedy, and greedy when others are fearful." — Warren Buffett