donwloadimg

Download App

Log in to access Online Inquiry

What Are Bull And Bear Markets

Views 65082022.08.03
playBtn

Key takeaways

  • Bull and bear markets are common terms among investors.

  • A bull market indicates optimism and growth while a bear market reflects pessimism and decline.

  • The generally accepted rule of thumb about bull/bear market is +/- 20%.

Understanding bull and bear markets

What are the most common lingoes among investors? The bull market and bear market must be on the list.

Bull markets and bear markets are usually used to describe market trends. There is no regulation on the extent of market changes, but the generally accepted rule of thumb for investors is +/- 20%. In other words, a bull market means that the upward market has risen by 20% from the bottom, while a bear market means that the downward market has fallen by 20% from the top.

There is no perfect strategy to survive through all bull and bear markets. But keep in mind that overall perception of the broader market is important for investment.

Bull market vs. Bear market

The stock market is a barometer of the economy. Bull markets are usually full of bullish voices, and stock prices continue to rise, accompanied by a strong economy. For instance, investors put hot money into the market, and companies often flood the IPO market and raise more funds.

A bear market usually occurs when the economy is on the brink of or in a recession. Bear markets are usually shrouded in pessimism. Investors tend to withdraw money from the market and wait out the bear market.

When investors are complacent and go in for speculation, a bull market can easily turn into a bubble, and then fall into a bear market.

Example

Take the $S&P 500 index(.SPX.US)$ as an example.

https://courseimg.futunn.com/2022063000000316d102732c7c0.png

In February and March 2020, the market took a catastrophic hit by the Covid-19 and economic recession. The circuit breaker was triggered four times for eight consecutive trading days. The SPX has plunged as much as 33% over that period.

With the help of global low interest-rate policies, government financial aids, and vaccine promotion, the market swiftly rebounded from the bottom and marched into new highs after shortly falling into a bear market.

In 2021, the SPX continues to hit new records. If we ignore the setbacks in 2020, we are still in the longest bull market in history since 2009, boosted by the information revolution, low interest rate, and robust corporate earnings, among others. 

Trade like a pro with moomoo

Get free stock and start your professional trading today

Terms and conditions apply right-arrow
This presentation is for informational and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Investment information provided in this content is general in nature, strictly for illustrative purposes, and may not be appropriate for all investors. It is provided without respect to individual investors’ financial sophistication, financial situation, investment objectives, investing time horizon, or risk tolerance. You should consider the appropriateness of this information having regard to your relevant personal circumstances before making any investment decisions. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal.Moomoo is a financial information and trading app offered by Moomoo Techonologies Inc.In the U.S., investment products and services available through the moomoo app are offered by Moomoo Financial Inc., a broker-dealer registered with the U.S. Securities and Exchange Commission (SEC) and a member of Financial Industry Regulatory Authority (FINRA)/Securities Investor Protection Corporation (SIPC).In Singapore, investment products and services available through the moomoo app are offered through Moomoo Financial Singapore Pte. Ltd. ("Moomoo Financial SG") regulated by the Monetary Authority of Singapore (MAS). Moomoo Financial SG is a Capital Markets Services Licence (License No. CMS101000) holder with the Exempt Financial Adviser Status. This advertisement has not been reviewed by the Monetary Authority of Singapore.In Australia, financial products and services available through the moomoo app are provided by Futu Securities (Australia) Ltd, an Australian Financial Services Licensee (AFSL No. 224663) regulated by the Australian Securities and Investment Commission (ASIC). Please read and understand our Financial Services Guide, Terms and Conditions, Privacy Policy and other disclosure documents which are available on our websites https://www.futuau.com and https://www.moomoo.com/au. Moomoo Technologies Inc., Moomoo Financial Inc., Moomoo Financial Singapore Pte. Ltd. and Futu Securities (Australia) Ltd are affiliated companies.
Expand

Recommended