Bull market vs. bear market: What's the difference?
FILE-Traders work on the floor of the New York Stock Exchange (NYSE) on March 12, 2025 in New York City. (Photo by Spencer Platt/Getty Images)
Stocks are falling for a third day as the Dow Jones Industrial Average fell and the S&P 500 dipped on Monday.
The unpredictable nature of the stock market and prices may lead some investors and financial experts to wonder what may happen to the market cycle if it ends up in a bull market or bear market.
What is a bull market?
Why you should care:
A bull market can last roughly five years and happens when asset prices rise over a long amount of time, usually defined as a 20% or more increase from their most recent low. A bull market can also refer to a price spike in a specific market.
RELATED: Trump tariffs live updates: Dow drops 1,200 and global markets plunge
The financial services company Bankrate noted that bull markets occur during a growing or strong economy, a stable gross domestic product (GDP), soaring corporate profits that boost stock prices, and low unemployment rates.
According to Bankrate, the longest bull market was from March 2009 to February 2020.
What is a bear market?
Dig deeper:
A bear market occurs when the S&P 500, the Dow Jones Industrial Average, or even an individual stock, declines 20% or more from a recent high for a sustained period of time, FOX 13 Tampa reported.
Bear markets can be caused by a struggling economy, high inflation, soaring interest rates, and shifts in the economy.
RELATED: Should you sell your stocks now? What to know amid Trump tariffs and market turmoil
Bear markets are shorter than bull markets and take place before an economic downturn and may signal a recession. According to Bankrate, some bull markets through the years were the Great Depression, the dot-com bubble, the Great Recession, when the pandemic began in February 2020.
Should I invest in a bull market or bear market?
Big picture view:
Knowing when a bull market or bear market is going to happen is hard to forecast, which is why Bankrate suggests concentrating on long-term investing instead of engaging in stock trading in a bull market or bear market.
Bankrate notes that there are few ways you can invest when there is a bear or bull market.
The financial services company explains on its website that if you are investing in a bear market you should do the following:
- Fight the urge to sell assets when the market drops.
- Consider defensive funds because they can perform well during economic downturns.
- Diversify your portfolio with bonds and dividend stocks that can produce good returns on your investment.
- Evaluate your investments.
When investing in a bull market here’s what you need to know:
- Investors should hold on to stocks that are leading specific areas like technology and financials.
- Add money to the market by spreading your funds in high and low asset prices.
- Temper your emotions and plan to reach your financial goals and stay consistent with it.
The Source: Information for this story was provided by Bankrate, the Associated Press, and previous reporting by FOX 13 Tampa. This story was reported from Washington, D.C.