Finance
Bull vs Bear Market
You’ll hear markets called "bullish" or "bearish" constantly. The terms describe the overall direction and mood of prices — rising or falling — over a sustained period.
| Aspect | Bull market | Bear market |
|---|---|---|
| Direction | Prices rising over time | Prices falling over time |
| Mood | Optimism, confidence | Pessimism, fear |
| Common rule of thumb | A sustained rise | A fall of about 20% or more from recent highs |
| Memory aid | A bull attacks by thrusting horns up | A bear swipes its paws down |
| Typical investor behaviour | Buying, risk-taking | Selling, caution |
When to use bull market
A "bull market" describes an extended period of rising prices and optimism — though no one can reliably predict how long it will last.
When to use bear market
A "bear market" describes an extended decline, commonly marked at a 20% drop, usually accompanied by fear and caution.
Frequently asked questions
- How much does a market have to fall to be a "bear market"?
- A widely used rule of thumb is a decline of 20% or more from recent highs, sustained over time. A smaller dip of around 10% is often called a "correction." These thresholds are conventions, not exact laws.
- Where do the terms come from?
- The most common explanation is how each animal attacks: a bull thrusts its horns upward (prices up), while a bear swipes its paws downward (prices down). The exact origin is debated, but the imagery is a useful memory aid.
- Can you predict when one will end?
- Not reliably. Bull and bear markets are only clearly identified in hindsight, and no one can consistently time their tops and bottoms. This is educational information, not investment advice.