Bull Market vs. Bear Market: What You Need to Know

Let’s take a look at what bear and bull markets are, what to expect from them, and how to react to them for maximum profit.

What Is a Bull Market?

During a bull market, everything looks peachy the economy is doing great, stock prices are high, and unemployment is low.

Types of Bull Markets

When you hear bull markets discussed, chances are that it’s referring to stock market indices (namely the S&P 500, NASDAQ, or Dow Jones Industrial Average).

The three major stock market indices outlined above tend to move in line with each other and usually boom when the economy is doing well.

Stock Bull Markets

Gold Bull Markets

For instance, after a long bull market for stocks finished in 2000, gold went into a bull market from 2000 to 2011.

Bond Bull Markets

Unlike many other assets, bonds haven’t experienced such large extremes recently. In fact, they’ve remained in a bull market ever since the 80s, never yielding negative returns.

What Is a Bear Market?

The mechanisms here are very similar to those found in a bull market, except that everything happens in reverse: prices decline, so more investors sell, resulting in prices to continually decline.

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