Bull Market vs. Bear Market? What You Need to Know

The stock market can seem like a game of chance — you might wake up one day to find that your investments have grown by 5% overnight, then six months down the line, there was an unexpected crash, and you’ve lost all your gains.

What Is a Bull Market?

If I had to sum up the sentiment of a bull market in five words, it would be these: let the good times roll. During a bull market, everything looks peachy — the economy is doing great, stock prices are high, and unemployment is low.

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Types of Bull Markets When you hear bull markets discussed, chances are that it’s referring to stock market indices (namely the S&P 500, NASDAQ, or Dow Jones Industrial Average)

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The three major stock market indices outlined above tend to move in line with each other and usually boom when the economy is doing well.

Stock bull markets

Gold bull markets Physical gold, ETFs, and gold stocks often do well when the stock market is struggling. For instance, after a long bull market for stocks finished in 2000, gold went into a bull market from 2000 to 2011.

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What Is a Bear Market? This might all sound like a disaster for investors, but that isn’t necessarily true — because just like bull markets, bear markets can’t last forever. Understanding Bull Markets and Bear Markets During the economy’s expansion, the bull market is in full swing; then, after it reaches its peak, it creeps into a bear market.

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How Should You React to Bull Markets and Bear Markets?

No matter how well you know the theory, it’s useless if you can’t apply it to improving your investment decisions and becoming a more profitable trader.

One thing you should have picked up on by now is that you can’t have a bull market without a bear market, and vice versa

How Should You React to Bull Markets and Bear Markets?

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