What is a Bull and Bear Market?
Financial markets are greatly influenced by the confidence and emotions of investors. The terms Bullish and Bearish are commonly used to describe prevailing and price movements that are affected by these market sentiments. The terms 'bull market' or 'bear market' are most often used to refer to the stock market, but can be applied to anything that is traded, such as bonds, real estate, currencies, and commodities.
A Bull Market is characterised by rising asset prices that are fueled by investors optimism, confidence, and expectations. In simple words, if you believe that a stock's price is likely to go up, you are bullish on the stock. From a broader perspective, if a stock/ index/ currency/ commodity is going up during a particular time period, it is referred to as a bull market.
A Bear Market is when the market experiences prolonged price declines. It typically describes a condition in which securities prices fall 20% or more from their recent highs, often accompanied by negative sentiments and declining economic prospects.