Key takeaways
Bull and bear markets are common terms among investors.
A bull market indicates optimism and growth while a bear market reflects pessimism and decline.
The generally accepted rule of thumb about bull/bear market is +/- 20%.
Understanding bull and bear markets
What are the most common lingoes among investors? The bull market and bear market must be on the list.
Bull markets and bear markets are usually used to describe market trends. There is no regulation on the extent of market changes, but the generally accepted rule of thumb for investors is +/- 20%. In other words, a bull market means that the upward market has risen by 20% from the bottom, while a bear market means that the downward market has fallen by 20% from the top.
There is no perfect strategy to survive through all bull and bear markets. But keep in mind that overall perception of the broader market is important for investment.
Bull market vs. Bear market
The stock market is a barometer of the economy. Bull markets are usually full of bullish voices, and stock prices continue to rise, accompanied by a strong economy. For instance, investors put hot money into the market, and companies often flood the IPO market and raise more funds.
A bear market usually occurs when the economy is on the brink of or in a recession. Bear markets are usually shrouded in pessimism. Investors tend to withdraw money from the market and wait out the bear market.
When investors are complacent and go in for speculation, a bull market can easily turn into a bubble, and then fall into a bear market.
Example
Take the $S&P 500 index(.SPX.US)$ as an example.
In February and March 2020, the market took a catastrophic hit by the Covid-19 and economic recession. The circuit breaker was triggered four times for eight consecutive trading days. The SPX has plunged as much as 33% over that period.
With the help of global low interest-rate policies, government financial aids, and vaccine promotion, the market swiftly rebounded from the bottom and marched into new highs after shortly falling into a bear market.
In 2021, the SPX continues to hit new records. If we ignore the setbacks in 2020, we are still in the longest bull market in history since 2009, boosted by the information revolution, low interest rate, and robust corporate earnings, among others.
Comment(24)
Cool
thanks
Nice 👍🏻
oh i c bear is down n bull charge up
I actually needed to know this I have been wondering what the heck they're all that meant thank you
thanks for the precious info, learned
Got it. Thank you
You mentioned nothing of the corruption and the blatant manipulatioN though. All I heard was a quick “some deceptive rebounds may occur,” but then no teaching or explaining of how or why (or how super frequent and common) that is.
Didn’t like this one for any beginners, and you should change this one up moo moo… @moomoo Academy
thank you for considering the protection of all of our precious New investors….if we are being REAL here, it should be taught that this illegal “deception” occurs every single trading DAY. And that it’s an essential part of their (hedge funds, SEC, DTCC, fed, govt) rigged stock game, and it should be Highlighted as such - especially if your claim here is to educate.
very nice
Cool info to learn.
Loving it soon far
I Love this app ....
learning every day..
Will the bill continue
NICE 👍
Of course! Buy dips!
very informative
good
Got it
very educational
Can anyone help me
Good
nice
Moomoo
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