Bull Market vs Bear Market

Bull and bear markets define the two major phases of market cycles. A bull market is generally defined as a 20%+ rise from a recent low, while a bear market is a 20%+ decline from a recent high. Since 1950, the average bull market has lasted about 5 years while the average bear market lasted about 10 months.

• Bull market characteristics: Rising prices, high investor confidence, expanding PE ratios, strong economic growth.
• Bear market characteristics: Falling prices, fear and pessimism, contracting PE ratios, often accompanied by recession.
• Correction — A 10-20% decline. Not a bear market, but can feel like one.
• Market breadth — Healthy bull markets have broad participation (many stocks rising, not just a few).
• Capitulation — A sharp sell-off on extreme volume that often marks the end of a bear market.