What is the Difference Between a Bear and a Bull Market?
A bear market is a decline in a market. A bear market is most often referred to with the stock market. If the markets have been declining over a long term time period, which can be months or longer, the markets are acting bearish. This is usually determined by looking at how an index is doing such as the DJIA or the S&P 500. For example, if the S&P 500 has been down 15% for the past year, it would be considered a bear market. A bull market is just the opposite. A bull market is when the stock market has been increasing faster than the average. Again, indexes are usually used as a benchmark to determine a bull market. If the historical average return for an index is 12% and for the last year or so it has been 16%, then it is a bull market. What causes a bull or bear market? These markets fluctuate with the economy. If the economy is doing poorly and there is a recession, the markets are bearish and will go down with it. If the economy is doing especially well and these businesses are bo
