Bull and bear market — bull market vs bear market
What is a bull market (hossa) and bear market (bessa), how to recognize them and what they mean for investors. Differences, history and strategies.
Definitions
Bull market (bull market / hossa) — a period when asset prices rise by at least 20% from the last trough. It's characterized by optimism, rising employment and economic growth.
Bear market (bear market / bessa) — a period when asset prices fall by at least 20% from the last peak. It's accompanied by pessimism, recession fears and capital flight.
Where do these names come from?
A bull attacks with its horns from bottom to top — symbolizing rises. A bear strikes with its paw from top to bottom — symbolizing falls. These names have been used on stock exchanges since the 18th century.
How to recognize bull and bear markets?
| Feature | Bull market (bull) | Bear market (bear) |
|---|---|---|
| Price change | > +20% | > -20% |
| Sentiment | Optimism, FOMO | Fear, panic |
| Economy | GDP growth | Slowdown/recession |
| Duration (average) | 4–5 years | 9–16 months |
| Volume | Rising | Falling, then panic selling |
History in the US market (S&P 500)
- 2009–2020 — the longest bull market in history (~11 years, +400%)
- 2020 (COVID) — the fastest bear market (34% drop in 23 days) and fastest recovery
- 2022 — tech bear market (S&P -25%, Nasdaq -33%)
On the Polish WIG20, bear and bull markets tend to be more volatile due to lower market liquidity.
What to do during a bull market?
- Stick to your investment plan
- Don't give in to FOMO (Fear Of Missing Out) — don't buy "because everything is rising"
- Rebalance your portfolio — sell overweight stocks, buy bonds
- Remember: every bull market eventually ends
What to do during a bear market?
- Don't panic and don't sell — historically, markets have always recovered
- Continue regular investments (DCA) — you're buying cheaper
- Consider increasing your stock allocation at the expense of bonds
- Check your emergency fund — is it enough to survive without selling investments?
The most important statistic
Since 1926, the average bull market on the S&P 500 lasted ~4.4 years and returned +155%. The average bear market lasted ~1.3 years and took away -36%. Markets rise much more frequently and for longer periods than they fall — that's why the buy & hold strategy works.
How Freenance can help
Freenance shows your portfolio value over time — you'll see bull and bear markets in your own investments. This helps maintain perspective and avoid making emotional decisions in panic.
👉 Track your portfolio through bulls and bears — freenance.io
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