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Bull Market vs. Bear Market
Bear Market and Bull Market may be defined as polar opposites. Most investors and consumers would consider a Bull Market a much more favorable market than a Bear Market. In a Bull Market, stock prices tend to rise, which means that stock holders will gain profits from stocks that they sell. A Bull Market is therefore, very competitive in nature. An investor that has purchased solid stock options will reap the benefits in a Bull Market. Stock prices for sales are generally higher in these environments. Bear markets are more often associated with a decline in the economy, even a recession. Under some circumstances however, a Bear market may be considered favorable. For the consumer looking for a good deal on stocks that may increase in value over a longer period of time, the Bear Market may offer some benefits. These ideas are explored in greater detail below.
Bear Market may be defined as "a long-term downtrend" (Walker, 2001) which may last several months and extend into years, and...
A Bear Market is typically defined by "lower intermediate lows" that are interrupted "by lower intermediate highs" (Walker, 2001). A bear market typically exhibits a decline of at minimum 15% in the major stock market indexes (Walker, 2001). Typically the economy is in a downturn during this type of market, and stockholders have a difficult time selling stocks that may not be producing. Alternatively however, those investors looking for a good discount may be able to purchase mass quantities of stock in a firm for much less expensive rates during this type of market. If a stockholder has the ability to hold onto their investment for a long period of time, in some circumstances greater than ten years, the effects of a Bear Market may not be long lasting.
Bull Market is the opposite of a Bear Market, and is typically characterized by a "long-term uptrend in price movement in any market," characterized by "a series of higher intermediate highs interrupted by higher consecutive…
Bibliography
Vault. "Bears vs. Bulls - The Equity Markets" pp. 1-3. Available, http://www.vault.com/nr/newsmain.jsp?nr_page=3&ch_id=322&article_id=19363&cat_id=1021
Walker, Jeff. (2001). "Bear Markets." Retrieved January 17, 2004, http://www.lowrisk.com/bullbear.htm
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