What are the differences between a bear and bull market?

In stock market parlance, a bear market means stocks are down 20% or more while a bull signals the market is up significantly. Both are a part of the stock market’s lifecycle: You’ll see your fair share of each, and knowing what to expect can help you handle your investment decisions.

What are the consequences of a bear market?

A bear market can be more dangerous to invest in, as many equities lose value and prices become volatile. Since it is hard to time a market bottom, investors may withdraw their money from a bear market and sit on cash until the trend reverses, further sending prices lower.

How long does a bear or bull market last?

Historically, bear markets tend to be shorter than bull markets. The average length of a bear market is just 289 days, or just under 10 months. Some bear markets have lasted for years, while others only ran for a few months. The longest bear market occurred from March 1937 until April 1942—The Great Depression—and lasted for 61 months.

What is the definition of a bear market?

A bear market is when stock prices on major market indexes, like the S&P 500 or Dow Jones industrial average ( DJIA ), fall by at least 20% from a recent high. This is in contrast to a market correction, which is a fall of at least 10% and tends to be much shorter lived. Corrections generally don’t lead to full bear markets.