What is a bull market vs a bear market?
A bull market is a sustained rise in prices and optimism; a bear market is a prolonged fall (often 20%+) and pessimism. Both are normal parts of the cycle.
A bull market is a prolonged period of rising prices and rising confidence, where investors expect gains and buying feeds on itself. A bear market is the opposite — a sustained decline, conventionally a fall of 20% or more from recent highs, marked by fear and selling. The names come from how each animal attacks: a bull thrusts up, a bear swipes down.
Both are normal. Markets move in cycles: long climbs interrupted by sharp, scary falls, followed by recovery. No bull market lasts forever, and no bear market does either. Trying to perfectly time the switch is a losing game even for professionals.
The practical lesson is behavioural. Bull markets tempt overconfidence and chasing; bear markets trigger panic-selling at exactly the wrong time. Disciplined investors keep contributing through both (a SIP does this automatically), knowing that the worst days and best days cluster together — and missing the rebounds is what really hurts long-term returns.
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Common questions
What exactly defines a bear market?
A common rule of thumb is a decline of 20% or more from recent peaks, sustained over weeks or months — not a one-day drop. A milder dip of around 10% is usually called a "correction".
Should I sell in a bear market?
Panic-selling locks in losses and risks missing the recovery, which often comes fast and unannounced. For long-term investors, continuing to invest steadily (e.g. via SIP) through downturns has historically worked better than trying to time exits.