Introduction to Bull and Bear Markets

Bull and bear markets are key investment terms and symbols that capture the sentiment (bull market) or negative positive sentiment (bear market) of the market。There are no formal rules for how to determine, but a bull market often refers to a market that rises 20% from the bottom over time, while a bear market indicates a 20% drop from the top。In general, "bull" sentiment positive or "bear" negative sentiment can refer to the upward or downward movement of almost anything, such as individual stocks.。Some Americans say they are "bullish" and in sectors with growth potential, or "bearish" on stocks they think will fall。

例子

Driven by the first wave of the Internet boom, the 1990s became a famous bull market - the Poole 500 index rose 418% from October 1990 to March 2000, then fell。Since then, market sentiment has followed a sharp downturn, with the S & P 500 down 40% as of September 2002。

Essentials

Bull and bear markets are labels that simplify the description and are used to describe the ups and downs of the market over time.。The meaning of these words has been expanded to capture the general sentiment of stocks, markets, sectors, or even just investor optimism or pessimism。

Where do the names of bull and bear markets come from?？

There is a lot of debate about how positive and commentator market movements originate, with greater acceptance for natural and historical reasons.。

"Nature" Theory

Bulls want to push up with their horns and bears want to catch further with their claws, an image that has become a symbol of market movements - you can imagine a bull rushing up as the stock rises; or a bear plunging down as time finally falls。

On History

During the colonial era, bear skin, along with many other animal furs, was a single trade。Traders sometimes sell bear skins they haven't bought yet to meet demand。Because they have to buy bear skin to meet the order, hoping that the price of their bear skin will fall。The desire for bearskin prices to fall led to the nickname "Bear."。Every "yin" needs a "yang," so the long becomes the counterpart of the short。

Some people even think that the name comes from Frankfurt Financial Forex.。"Bull (cow)" may have originated on the London Stock Exchange, rather than referring to animals。The London Stock Exchange, founded in the 17th century, is one of the first officially recognized securities exchanges in the modern world, with bulletin boards that signal when the market improves, and the "bull market" soon became synonymous with the concept.。

Defining Rules for Bull and Bear Markets

There is no specific, globally accepted, computationally perfect rulebook to accurately judge a bull or bear market, but there are some generally accepted defining concepts。The most commonly used easing criterion for a bull or bear market is the 20% rule: a bull market occurs if the market rises 20% from a low (variable) trough; for a bear market, the egg market falls 20% from a high (infectious disease epidemic)。

This means you have to review the historical price changes of a stock or market and tease out whether it is a bull or bear market。First, you have to determine the low point of the stock or market, and then find the demographic change - if it is 20%, then the period is a bull market;。

For example, let's look at the S & P 500。We often use the example of this stock index because it captures the movement of 500 stocks and therefore helps to reflect the movement of the broader market。

• From 2007 to 2009, the S & P 500 fell about 50%, so it's called a bear market。Over the next 11 years, from 2009 to February 2020,
  The S & P 500 is up more than 300%, so the so-called bull market is the longest-lasting bull market in history。

Both periods gained a bull / bear combination as they both grew or declined by more than 20%。

Bull and bear markets in history

The history of the modern stock market is defined by periods of sustained bull and bear markets - booms and busts, when stocks rose more than 20% overall and then fell more than 20%。While you'll notice that stocks have generally moved higher throughout the history of U.S. stock trading, there have been intermittent cycles between going up or down。Since the end of the war, investors have experienced 11 final bull markets, each accompanied by a bear market.。

Recent bull and bear markets

While bull and bear markets can be decades ago, we have experienced several key shifts in the 20th century.。For example, the 2008 financial crisis, driven largely by investment machines and unsustainable debt in the real estate market, led to a rapid stock market rally The S & P 500 lost more than half of its value in just over a year - enough to turn a period in stock market history into a bear market.。

As the crisis subsided, the government bailed out financial institutions and businesses recovered, the economy began to recover from market lows (variety troughs) in March 2009.。In the more than 100 months since then, the value of the S & P 500 has doubled into early 2020, more than a decade after the economic collapse bottomed out, and the United States has experienced a major bull market.。In fact, this is the period since the war since the last bull market。

In February and March 2020, the S & P 500 experienced a historic plunge due to economic turmoil and uncertainty from the COVID-19 pandemic。However, with the introduction of the government stimulus plan and investor optimism, the index P500 rebounded, posting historic gains and visual new highs.。Between March and August 2020, the S & P 500 rose more than 54%, and a bull market reappeared.。

However, it is worth noting that there has been a historic increase, but the National Bureau of Economic Research (NBER) officially announced the funding in June 2020, even though the US economy has fallen into contraction.。

Other bull and bear markets to understand

Here are some other major bull and bear markets to keep in mind (continue to use the S & P 500 as an example) and some of their drivers:

• Post-war "peacetime prosperity" (bull market):Driven by post-war industrialization, the Standard & Poor's 500 index rose 85 percent in the nearly 50 months to the late 1950s。early 60s
  (Bear market):As the market recalls, the S & P 500 is down nearly 30% in less than a year - investors just think the market has grown too fast over the past decade。1980s Corporate Action (Bull Market
  ）：The S & P 500 more than doubled as deregulation led to mergers, acquisitions and a flurry of market activity that drove corporate profits。The 1987 Crash (Bear Market
  ）：Concerns over inflation and computerized trading led to the famous Black Monday crash。The S & P 500 eventually lost a third of its value in just a few months before recovering。
  The Internet in the 1990s 1.0 (bull market):It was one of last week's bull markets that preceded the current one, with investments in the first consumer-centric digital companies to adopt the Internet causing the S & P 500 to rise nearly 417 percent in a decade.。2000 dotcom bust (bear market): cash influx without full business plan
  Internet giants in the first wave of corporate IPOs were unable to cash in on profits reflected in their share prices, causing the S & P 500 to lose 37% of its value in less than two years。

Causes of bull and bear markets

Bull and bear markets are just a reflection of the overall movement of stocks (up or down) - so some of the important parameters that affect stocks affect whether the market is bull or bear。The following are common market driving forces that can cause or normally reflect a bull or bear market:

• Employment rate:During a bull market, employment tends to rise as companies hire more people, but in a bear market, employment tends to fall as companies lay off workers to cut costs。Interest rates: Fed likely to stay low
  Borrowinginterest rates to push the market up; or the Fed may raise interest rates, making it more expensive to borrow, causing the economy to shrink。
  International Investment:Foreign investment, or a surge in demand for foreign goods, can boost economic growth, but cuts in investment from other countries could hurt businesses and affect their stocks.。
  Confidence:Investor enthusiasm may be a key driver of buying and selling stocks, driving the market。If investors have the cash and believe the economy is moving in the right or wrong direction, they will take signals that may reinforce this little bit by bit trend.。

As an investor, both bull and bear markets occur, and there is a continuous back-and-forth, complementary, perfectly correlated bull or bear market (the cycle may have noticed that bull markets are often followed by bear markets, and vice versa)。Bull and bear markets are hallmarks of investing because investors get this emotional - and should be fully identified when things happen。Understanding how bull and bear markets react to positive and negative trends is key to navigating the stock market。