2 Answers | Add Yours
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).
A bull market and a bear market are two kinds of events that can occur in the stock market. Both will impact investors.
During a bull market, the stock market will rise over a period of time. This usually indicates that investors feel good about the direction our economy is heading.
In a bear market, stock prices are falling over a period of time. This usually indicates that people are concerned about the direction our economy is going.
In both markets, people can make or lose money. If people panic during a bear market, they may sell their stocks too soon and lose money on their investment. If people jump into the stock market during a bull market, they may pay too much for the stock and end up selling it for a loss if the price of the stock drops.
During a bear market, a person might be able to get a stock at a low price. If they buy it at a low price and sell it during a bull market, they could make money on the stock. Bullish and bearish are two terms used to describe the attitudes of investors regarding the stock market.
We’ve answered 315,929 questions. We can answer yours, too.Ask a question