Connect with us

Hi, what are you looking for?

Stock market and Investment

An Introduction to Bull Market & Bear Market

A bull market is one in which the market is rising and the economy is doing well, whereas a bear market is one in which the economy is declining and most stocks are losing value.

An Introduction to Bull Market & Bear Market
Photo by geralt

What is a Market? A market is an area/place where goods, services, and commodities are exchanged or, in general, buying and selling happen. In this article, I am referring to the Stock Market, i.e., a public place to trade(Buy & Sell) shares of companies listed on those stock exchanges.

An Introduction to Bull Market & Bear Market
Image via

All countries have different stock exchanges, like NYSE, NASDAQ & Amex in the United States, NSE & BSE in India, the London Stock Exchange in the United Kingdom, NIKKIE in Japan. Even though all the exchanges are different, they have many similarities. One characteristic that all the markets have is that they have upwards and downward trends. It is referred to as a Bull Market Trend or a Bear Market Trend in the financial world.

So, what is a Bull Market?
An Introduction to Bull Market & Bear Market

Bull markets in the stock market occur when the prices of the stocks have increased by 20% or more since their last fall. During the “Bullish” trends, the valuation of the shares is expected to rise for a long time.

Bull Markets reflect optimism and investors’ confidence in the market. It generally lasts till the investors believe the prices would continue to increase and climb up. This belief leads to increased investment in the stock market, which subsequently influences the value of the stocks. It leads to a jargon used in investing called a self-fulling prophecy.

In the future, if the stock prices fall, the investors enter into a state of irrational exuberance, where they quote prices much more than the actual value of the underlying stock. This cause creates a ‘bubble’ in the market. The bubble increases until the supply of the stock resists no more increase in the price. The investors panic at this stage and start selling the stock. It causes the bubble to burst. It can also be referred to as capitulation.

The moment the prices dip lower than 20%, the market becomes a Bear Market.

So, What is a Bear market?
An Introduction to Bull Market & Bear Market

A bear market is when the market falls over 20% from the recent high. During this “Bearish” trend, the stock prices are expected to fall for a prolonged period.

Bearish Markets tend to spread pessimistic sentiments among the investors. During the bearish trend, the investors believe that a decrease in the stock prices would be. Post Capitulation, the share prices sharply fall when the ‘speculators’ enter the market, consequently raising prices and trading volume. Post their entry, the stock prices continue to fall slowly. These low prices attract investors again, and the bear market starts changing into the Bull Market Again!

Advertisement. Scroll to continue reading.

Let us take a real-life example, the great depression in 1929, the dot com bubble that burst in 2000, and the housing crisis of 2007-08 in the United States.

For long-term returns and safe investments, it is imperative for us to understand the market trends and invest in stock with solid fundamentals by analyzing the company’s financial health, the market, & the macroeconomy in general.

Written By

Neel writes content for Empire weekly covering the Financial and Stock Markets. He is an avid enthusiast in the finance domain. He is currently pursuing MBA in Business Management. He has completed his Bachelors of Commerce and has worked in the Auditing domain before going for his masters.

Click to comment


  1. Pingback: Top Books to read about Stock Market and Investing

  2. Pingback: Stock Market: Introduction, Basics, and Definitions

Leave a Reply

Your email address will not be published. Required fields are marked *


Latest News

24th Edition BFSI IT Summit

Press Release

Mumbai: The banking, financial services, and insurance (BFSI) sector in Mumbai is currently undergoing a profound transformation, fueled by rapid technological advancements and a...

Best No Code App Builders Best No Code App Builders

Digital Transformation

In the ever-evolving landscape of technology, the rise of No Code App Builders stands as a testament to the democratization of app development. Gone...

11 Best AI Image Enhancer & Upscaler Tools (February 2024) 11 Best AI Image Enhancer & Upscaler Tools (February 2024)

Artificial Intelligence

In a world flooded with digital photos, the demand for high-quality images is ever-growing. Whether you’re a social media enthusiast or a professional in...


You May Also Like

Mystery and History

The great imaginative minds have given birth to some of the most legendary and eye-popping hybrid mythological creatures.


A complete system audit of the bank's IT system has also been ordered.

Empire Weekly Exclusive

Because of the character's widespread appeal, Iron Man has appeared in multiple comics, television series, and films.

India News

Saweety Boora produced a superb show against her Chinese opponent and was declared winner by points as India won both the finals scheduled for...