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 −

Characteristics	Bull Market	Bear Market
Market	Market is up	Market is down
Sign	Sign of optimism	Sign of pessimism
Trade	Buying stocks in large volume	Selling stocks in large volume
Economy	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
Employment	Low unemployment	High unemployment
Confidence	Investors will generally have high confidence on the market	Investors will generally have low confidence on the market
IPO	The amount of IPO (initial public offering) generally increases during this period	The amount of IPO generally tends to decrease during this period
Interest	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
Investment	Growth stocks in bull market are high	Value stocks in bear market are high

Conclusion

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.