Bear Market Vs Bull Market Essay

The general sentiment of the stock market can be defined bullish or bearish and the market on the whole can be called bull market or a bear market.
A bull market indicates positive sentiment with uptrend in the stock market. On the other hand a bear market indicates downtrend in the stock market with negative sentiment. Uptrend means that the stock price is showing appreciation while downtrend means that with time the stock price is having depreciation.

Stocks too can be defined in terms of bullish and bearish sentiment. A particular stock that is in a downtrend is described to be bearish and a stock in an uptrend is said to bullish.

Bull market
In a bull market, there is increasing investor confidence which leads to appreciation of stock prices. This occurs as investors feel that the economy will keep seeing better days and the investments will fetch high return. Thus, there is a positive sentiment in the investor community about the economy. This may occur due to several reasons like reasonable interest rates with good economic health indicators like low unemployment. There is an overall optimism about the economy and this causes more demand than supply for securities. This keeps pushing the prices of securities higher. Eventually there occurs euphoria of buying leading to pricing bubbles which …show more content…
They generally occur when the economy faces a crisis like slowdowns. The investors tend to lose their confidence and that leads to sell off in the stock markets. Investors unload their stock with the perception that condition of the economy will worsen and earnings will continue to decline. They expect that in future the stocks will be available at much lower levels and buying can be done at those levels. Defensive investment instruments like bonds, then draw attention because of the safety they carry. End of bear markets is generally marked by exaggerated selling activity where there is the extreme bearish