What Are Bull and Bear Markets?
Bull market. A bull market is typically defined as an increase of 40 percent in the Dow Jones Industrial Average or the S&P 500. Ups, downs and losses can still occur during a bull market. Bull market gains are generally tied to economic prosperity. Investors enjoy positive investment gains for an extended period of time. Although the general trend is positive, prices may fluctuate daily during a bull market. Factors that could lead to a bull market: Low interest rates Low inflation Strong corporate earnings Low budget deficit Political stability or lack of international conflicts Low unemployment Moderate economic growth Bear market. Bear markets are based on the changes of a stock index such as the Dow Jones Industrial Average or the S&P 500 – with a decline of 15 percent of more over an extended period of time. Prices will fluctuate during a bear market, with gains realized from time to time. A bear market may last a few months of a few years. Factors that could lead to a bear marke
