During bull markets – times when the market trends upward – most people can expect to see their investments rise in value and turn a profit. However, there are also downturns and periods during which this does not happen. These periods of time where investments decrease or even plummet in value surrounded by uncertainty are called bear markets.
A bear market is any period during which stock prices fall and widespread pessimism causes the stock market's downward trend to be sustained. Bear markets generally last two to three years and result in substantial losses for the overall market as well as individual investors.
They are generally associated with declining business activity, high unemployment rates, low consumer confidence levels, and steep declines in asset prices. The severity of bear markets can vary greatly depending on several factors such as how much-preceding gains were achieved as well as what stage the economy was at prior to their onset.
Bear markets are generally considered healthy for an economy as they allow prices to adjust downward. By understanding bear markets, investors can take steps to move toward safety and ride out any temporary losses until stock prices level back out again. However, it is important to note that spotting a bear market before it begins does not guarantee success or protection against loss because no two bear markets are alike.
Bear markets are often accompanied by high unemployment rates, lower levels of consumer spending, and steep declines in asset prices. These factors tend to cause investors to become more conservative with their investments which can lead to a feedback loop that further exacerbates market declines. However, it is important to remember that bear markets do not last forever and that they usually result in bull markets once positive returns start making a comeback again. Because the term "bear" is so closely tied with negative connotations surrounding loss, you can expect many people who were burned during one of these periods to have a negative association with the term as a whole.
The duration of bear markets can vary from one to several years and typically result in steep declines in assets as well as widespread pessimism among investors. In addition, bear markets are generally associated with increased unemployment rates, lower consumer confidence levels, and decreased business activity or expansion.
Generally speaking, once these periods have run their course, bullish trends often begin again which leads to increased investments and higher stock prices. Even so, it should be noted that no two bear markets are alike so you should always research the causes before assuming they will play out accordingly.
The Bear is a dealer who speculates a fall in prices in
makes a contract of selling at present but neither delivers the future when the
price is low. He earns profit by speculation. He goods nor accepts a price till
a stipulated time in the future. The Bear is also defined as a dealer on the
Stock Exchange who sells for future deliveries the securities which he does not
possess. He hopes that their prices will fall and so enable him to acquire the
securities at a reduced price in time for delivery.
Bull Market
The term "bull market" is typically reserved for extended periods in which prices of securities are rising. The definition can be applied to anything that's traded, such as bonds and real estate but it usually refers specifically to stock markets where people buy low when they expect their investments will eventually go up even higher than what has been reached at present time.
A bull market starts out like any other business: with cautious optimism followed by aggressive speculation until finally settling down into an economy-driven equilibrium between supply and demand over a long period - sometimes years!
Characteristic of Bull Market
A bull market is when the economy is strong and getting stronger. This can be seen in a drop in unemployment, or a rise in corporate profits for example. Stock prices tend to go up during these times too with positive investor confidence making it likely that you will see more IPO's come out into public markets as well because people are confident enough they'll make their money back quickly before interest rates start going up again!
The factors that influence market sentiment are difficult, if not impossible to quantify. While corporate profits and unemployment rates can be quantified with relative ease by economists in academia or government agencies alike; it is considerably more challenging for them-in particular those who research economic trends over longer periods of time like myself -to analyze how general public opinion might have changed as a function of these numbers on their own terms without being influenced by outside forces such as media coverage which could skew our understanding due simply because we don't know what information sources people turn too at different points during the day.
