Introduction to Understanding Bull and Bear Markets

Simply put, bull markets are movements in the stock market in which prices are rising and the consensus is that prices will continue moving upward. During this time, economic production is strong and jobs are plentiful. Inflation is low. Bear markets are the opposite—stock prices are falling, and the view is that they will continue falling. The economy also slows down, and unemployment and inflation rise. In either scenario, people invest as though the trend will continue.

Investors who think and act as though the market will start to rise or keep on rising are said to be bullish, while those who think it will start to fall or continue falling are bearish. As an educated investor, you need to be aware of the market sentiment and make investment decisions accordingly.