People often ignore the economy and the stock market in general. It is very understandable since that certain topic can be intimidating for some especially those who can’t really understand some business terms. They would then think that it is absolutely boring and it wouldn’t exactly help them in any other way, especially if they are not involved in any business or did not invest in any stocks.
Some of the most popular terms in this topic are Wall Street, stockbrokers, financial crisis, and more. There are two other terms that are also very popular, but despite that, most people who hear about them don’t exactly know what they are. That is the bull and the bear market, and people often get surprised when they hear that since it would seem as if it is a type of market wherein they sell bull and bear meat. What they don’t know is that it has nothing to do with the meat of the animal itself at all.
Bull VS Bear Market
Recently, these terms have been repeated over and over again on the news, so it would only be fair if people know exactly what they mean. The “bull” and the “bear” market actually refers to how exactly the stock market is doing. The bull market is a good thing, because that would mean that the economy is doing incredible considering the fact that the unemployment rate is very low, most businesses are booming, stocks are getting higher, and prices are going nowhere but up so the gross domestic product or the GDP is strong.
The bear market on the other hand, is the opposite. This is where the economy is not doing good at all, investors are losing faith over the sales, people are struggling with unemployment rising. Experts say that the bull market usually lasts longer than the bear market, however, the bear market may not last that long, but it could leave severe damages to the economy.
People often wonder why is it called the bull and the bear market, according to experts, that is based on the way that the animals actually attack their prey. The bull tends to have its horns way up, while the bear on the other hand, will have its paws downwards. There was also a time during the Elizabethan era in the United Kingdom, when bulls and bears used to get matched up with one another, hence they are now used to describe the state of the stock market.
In a bull market, investors are optimistic and are usually hoping to get more and more profits since the economy is doing well, with businesses booming. So technically, in a bear market, the investors would start to pull out their money since business will unlikely make reasonable profits, which will then lead to the decline of the stock market.
Longest bull run in the history of the stock market, congratulations America!
— Donald J. Trump (@realDonaldTrump) August 22, 2018
Longest Bull Market In History
It was around the beginning of 1980s up to the early 2000s, when the most profiled bull market history happened in American history. The Dow Jones Industrial Average or the DJIA went up by 16% . The current bull market actually started in 2009 since it was already stable and isn’t exactly going down and the economy finally picked up itself from posing a lot during the Great Recession.
Last Wednesday, became the longest bull market in history lasting for 3,453 days or lasting for nine and a half years without a decline. This current bull has managed to last nearly as twice as the previous one in 90s that ended in March of 2000. This may be such great news for the economy but experts believe that the longer the bull market goes at the moment, the more severe the damage will be once the bear market comes. They said that it may even be worse than the Great Depression wherein the bear market actually lost about 40%.
United States President Donald Trump even posted a tweet regarding this. Experts believe, however, that the effects of the trade wars and tariffs may be the reason for this bull market to go downhill into the bear market. It might take a few more years to see it but it will eventually come, so ad of now, it is best to just enjoy it but a the same time be cautious.