What is a bull and bear market?
A lens to analyze, understand, and predict potential outcomes of the financial market is defined by two perspectives: a bull or bear market.
A bull market is defined as a period when stock prices increase 20% following two periods of decline at a rate of 20% decrease and continue that trendline. While a bear market is defined as a period when stock prices decrease by 20% and continue that trajectory. What does this mean for you?
- Stock market value
- Unemployment rate
- Gross domestic product (GDP)
- Inflation rate
- Interest rates
Defining factors for bull markets include an increase in stock market value, jobs, and gross domestic product (GDP) with a decrease in inflation and interest rates. While defining factors for bear markets include a decrease in stock market value, jobs, and gross domestic product (GDP) with an increase in inflation and interest rates.