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Compare and contrast a bear market and a bull market.

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user7912901 | Student, Undergraduate | Honors

Posted May 17, 2013 at 8:39 AM via web

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Compare and contrast a bear market and a bull market.

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tjbrewer | Elementary School Teacher | (Level 2) Associate Educator

Posted May 21, 2013 at 3:08 AM (Answer #1)

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During a Bull market:

  • Stock prices rise in the long term
  • Inflation is stable, controlled
  • Interest rates decline
  • Bond prices rise in inverse relationship to interest rates
  • Economic indicators are strong and positive

During a Bear market:

  • Stock prices fall in the long term
  • Inflation rises quickly
  • Interest rates rise
  • Bond prices decline in inverse relationship to interest rates
  • Economic indicators are weak and negative with recession and high unemployment

During both markets:

  • Investors can still make money by wisely investing, e.g., in bonds during bear and stocks during bull markets.
  • There are investments that defy the general trend (i.e., some stocks rise during a bear market and some fall during a bull market because stock price is still related to company performance within the market). 

Bull and Bear Markets

Sources:

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