Difference between Bear market and Bull market

In the world of investment and share market, "bear market" and "bull market" are two important terms that are also seen as rivals of the financial world. Let's try to understand these terms and their difference in detail.

What is a Bull Market?

A bull market is a time period that might vary from several months to years when the stock prices are constantly rising. This term is generally used in the stock market where trading bonds, real estate, and currencies are common. An example of a bull market would be in the period of March 2019 to January 2020; in Cryptocurrency, the Sensex surged up to 98%.

When it comes to the financial world, a bull market describes the country's economic growth. Because of the thriving economy and unemployment, investors choose to hold on to securities, which indeed creates a market for buyers. No matter how many years the bull market runs, it’s a known fact that Bulls don't run forever.

What is a Bear Market?

A bear market is the exact opposite of a bull market. It is a period of several months to several years when the stock price declines or is accepted to decline. It is an economic trend where the economy is flowing downwards which leads to a drop in people’s confidence in the economy and most people prefer selling stocks during this period.

A bear market is also a good indicator of recession. The most famous and first bear market was called the “green depression”

Difference between Bull Market and Bear Market

The following table highlights the major differences between Bull Market and Bear Market −

Bull Market
Bear Market
Market is up
Market is down
Sign of optimism
Sign of pessimism
Buying stocks in large volume
Selling stocks in large volume
Takes place when the economy is already strong or when its strengthening
Takes place when the economy is already weak or weakening
Impact on country
GDP of the country will be raised
GDP of the country will fall
Low unemployment
High unemployment
Investors will generally have high confidence on the market
Investors will generally have low confidence on the market
The amount of IPO (initial public offering) generally increases during this period
The amount of IPO generally tends to decrease during this period
During this period investors are more interested in buying the stocks and investing in the stock market
During this period, investors are more interested in selling the stocks and getting out of the stock market
Market rate
Markets raising 20% rise after two 20% falls
Markets falling 20% fall from recent highs
Interest rates
Low interest rates accompany bull market
High interest rates accompany bear market
Growth stocks in bull market are high
Value stocks in bear market are high


Whether it's a bull market or a bear market, your aim should always be to invest or buy stocks at the lower price and wait till the market rises. Once you see the rise in your stocks, you can make a profit from it. Even though many experts spend hours to weeks analyzing the market, there is no guarantee about the market. It's always wise to think and research before investing your money in stocks.

When the market rises, it often creates optimism in the investors making it a bull market, whereas when the market falls, the investors get into a pessimistic attitude wanting to sell their stocks. So when you invest in stocks, all you can do is, sit back and wait patiently for the socks to raise. Happy Investing.

Updated on: 11-Jul-2022


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