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If you think that the biggest rivalry in the world is between 'Ronaldo and Messi fans' or between 'Federer and Nadal fans,' then you are not familiar with the world of finance. 

The Bull vs. Bear market feud has been in place since the dawn of these concepts. And during these events, investors respond by holding tightly onto their investments or selling them as fast as possible to get the best results. 

So, let's take a look at what the terms Bull market and the Bear market actually mean and their differences:

Bull Market vs Bear Market - Table of Contents

What Do You Mean by Bull Market?

A bull market is several months or years in which stock prices rise consistently or are expected to rise. The term bullish means the stock market and applies to anything traded, like real estate, bonds, currencies, and commodities. 

One of the biggest examples of bullish markets in the Indian stock market is the period from December 2011 to March 2015, when the Sensex surged by more than 98%. 

In the world of finance, the bull market is described as the economic environment of a country that is in the optimistic stage. But there is no specific way to identify this bull market yet financial instruments like real estate, stocks, bonds, etc. This is why you hear investors gain confidence in the stock market when it is in the bullish stage. 

What are the Key Indicators of a Bull Market?

There are 3 main indicators of a bull market, which are: 

  • Gross Domestic Product (GDP) of the country increases: When the GDP of a country is higher, this means that consumer spending is also high and a common indicator of the economy flourishing. 

  • Rising stock prices: When the price of stocks rises, more people gain confidence that the market will keep going up in the future, and major indices will also rise. 

  • Employment rates increases: Growth in the economy means overall business growth, which in turn means growth in the workforce.

A bullish market represents a multitude of profitmaking opportunities for investors as stock prices generally increase across the board. But this does not last forever nor give any advance notice of arrival.

What Do You Mean by a Bear Market?

The opposite condition of a bull market is a bear market. This is a period of several months or years in which stock prices are consistently declining or are expected to decline. 

The best example of a Bear Market is between March 2015 to February 2016, when the Sensex fell by more than 23%. 

A bear market describes an economic trend with a downward trend in the economy or stagnation in the market. In this stage, people's confidence is low, and they are prone to selling stock rather than buying. A bear market is also a good indicator of a recession - a long-term period of decline.

[ Check out and Learn How to Invest in Share Market ]

What are the Key Indicators of a Bear Market?

Higher unemployment rates: When unemployment rates are high, then it is a typical sign of a bear market. As the economy starts going down the slippery slope, companies start losing business, resulting in layoffs. 

Falling stock prices: As stock prices fall, fewer people want to buy stocks. Because of this, stock prices go down, and the market sees a slump. Even though the bear market seems bad, it does not last long. Economic problems come and go, but the stock market's resilience shows that it will rise again.

What are the Differences Between a Bullish and Bearish Market?

The bull and bear market can impact multiple economic benchmarkers differently, from the cost of goods to interest rates and more. But knowing these major differences can help you make better investment decisions. 

Bull MarketBear Market
Bull market is when the market is up.Bear market is when the market is down or going down.
A Bull market is a sign of optimism.A bear market is a sign of pessimism.
Involves buying of a large number of stocks.Is marked by the selling of stocks in large numbers.
The place where the economy is strong or strengthening.The place when the economy is weak or weakening.
There is a rise in the GDP of the country.There is a fall in GDP.
Low rates of unemployment.High rates of unemployment.
Investor confidence tends to increase through the bull market period.Investor confidence declines through the bear market stage.
Overall demand for stock is positive with the overall tone of the market.Overall demand for stocks is negative.
General increase in the amount of IPO or Initial Public Offering activities during bull markets.Number of IPOs tends to decrease in a bear market concept.
In the bull market, investors are willing to be a part of the stock market to make profits.In a bear market, investors are more willing to get out of their holdings in the stock market to minimize losses.

The overall behavior of the stock market impacts and is determined by how investors identify their behavior. But investor psychology and their sentiments are elementary to when the market goes up or down.

How to Invest in Each Market Phase?

When the market gets bumpy, you can feel inclined to act fast to protect your finances. But making fast decisions can cost you in the long run. But no tried-and-tested advice will help protect you during the market phase. You can take some steps to cover your bases to help come out on top of a bear or bull market.

  • Do not try timing the market: The stock market cannot be predicted, and it is frustrating to time it. You could miss out on some important returns by selling too quickly or holding off on investment altogether. Rather than figure out the market, focus on the time to understand the market. 

  • Rethinking your strategy: Instead of dwelling on whether you should invest or not, think about how you should invest. Irrespective of the cyclical swings, the historical experience of investing consistently is the best. Using strategies like dollar-cost averaging and investing consistently can help you reduce the impact of market volatility on your investment portfolio. 

  • Diversifying your portfolio: When the market makes you uneasy, you must consider diversifying your assets instead of selling. Stay on course and spread your risks across multiple asset types to make the bull-to-bearish market easy to handle.


In the end, no matter the situation, you need to make it your aim to buy stocks at the lowest possible price so that you can make a good profit when the market increases.

But, it is not easy to determine the rise and fall of the market, and there is no guarantee that your predictions about the movement from bullish to bearish or vice versa will work.

So, all you can do is keep investing and wait to see the returns.

About Author

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Founder & Managing Director of Investor Diary

I, Vishnu Deekonda, am dedicated to providing the proper financial education to every individual interested in becoming financially independent through intelligent investments.

I have trained people to build financial independence and observed people had got many myths about investing for beginners. I want to prove to such individuals that these myths are the bottlenecks to a successful trading portfolio. I wanted to share the knowledge I have gained through a decade of experience with the people willing to build a healthy stock return with less or no risk.

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