Bull vs Bear Market: What Do They Actually Mean?
You hear it on the news every day: “The Bulls are in control” or “We are entering a Bear market.” It sounds like a zoo, but it’s actually a strict mathematical definition. Here is how to tell which animal is ruling your portfolio right now.
The 20% Threshold
Wall Street doesn’t just guess. They use specific numbers to decide if we are in a Bull or Bear market.
| Term | Movement | Mood |
|---|---|---|
| Correction | -10% to -19% | Nervous |
| Bear Market | -20% or more | Panic (Fear) |
| Bull Market | +20% from Low | Greed (FOMO) |
A Bull thrusts its horns up into the air. (Market goes UP).
A Bear stands up and swipes its claws down. (Market goes DOWN).
| Strategy | Action |
|---|---|
| Bull | Ride the wave |
| Bear | Buy the dip |
The Cycle of Emotions
The market is driven by human emotion. Knowing where we are in the cycle helps you avoid doing something stupid (like selling at the bottom).
1. Optimism (The Bull)
“I’m a genius!” Everyone is making money. Your Uber driver is giving you stock tips. This is usually the top of the market.
2. Denial (The Correction)
“It’s just a small dip.” The market drops 10%. People think it will bounce back tomorrow. It doesn’t.
3. Panic (The Bear)
“The world is ending!” The market drops 20%+. News anchors talk about recession. People sell everything to “save what’s left.”
Note: This is actually the best time to buy.
Pro Tip: “Winter is Coming”
Bear markets are not a bug; they are a feature. They happen every 3-7 years.
Change Your Mindset
If your favorite shoes were 20% off, you would buy two pairs. When Apple stock is 20% off, why do you want to sell it?
Smart investors build wealth in Bear markets and collect it in Bull markets.