The History of Bull and Bear Market

Every market follows two market trends Bull and Bear. The terms Bull and Bear came into existence in the 18th century in England. These terms Bulls and Bears are referred to by the name of the animals because of their attacking position of prey and used to describe the market condition.

A bull stands straight and keeps his head down but horns upward straight in the air, which means now the prices are low, but they are going to rise soon. Or Bull Market is one in which the prices are initially low and then go high. A bull market is appreciating in value.

On the other hand, a bear stands straight and attacks the victim by keeping his claws downwards and tearing the flash, which shows that now the prices are high, but there will be a crash in prices. Or the Bear market is one in which prices are currently high and then go low. A bear market is depreciating in the value.

Most of the historical shreds of evidence show that the bear came into existence before the bull. In the early seventeenth century, the term “Bearskin” used in terms to sell and “Bearskin jobber” used for one who is selling.

Bear Market

When the economy of the country is falling, the rate of unemployment increases, time of recession, and prices of the stocks are declining, this market trend is known as Bear market. A market is considered as an actual bear market until there is 20% or more declination in the prices of stocks from recent highs.

The bear market shows recessions, unemployment and poverty in the nation. A bear market does not last long, but it could be dangerous to invest. But for some investors, a bear trend is the best opportunity to invest in those stocks which were out of budget at the time of the bull market. They buy good stocks at lower rates and wait until bull hits the market and makes a significant profit from this type of deal.

Bear Market Indicators

Depressed and sluggish economic growth

Decreasing stock prices

Higher unemployment rates

More investors take short positions

Raising interest rates

Tightened credit condition

Inverted yield curve

Long-term growth expectations changes

History of Market Crashes

Here is a list of the events when the Bear hit the market mightily and caused drastic loss to the market.

Event

Year

Percentage Change

Wall street crash

1929

-33.6%

End of Gold Standard

1931

-26.7%

World War II

1940

-24.6%

Post-WWII Demand Shock

1946

-16.9%

Black Monday

1987

-31.3%

LTCM

1998

-8.7%

Dot-Com Bubble

2002

-19.3%

Lehman Crisis

2008

-25.2%

Great Financial Crisis

2009

-13.8%

US Debt Downgrade

2011

-16.7%

COVID 19 Outbreak

2020

-20.7%

Bull Market

When the economy of the country is booming, the prices of stocks are going high, and there is a rise of 20% or more from the latest low point, this market trend is known as Bull Market. The bull market shows the prosperity of the nation. Bull markets tend to last for more extended periods and make much larger magnitudes than bear markets.

In the bull market, the condition of the economy is generally favourable. At the time of bull, the investors stay calm and enjoy their investment rising until they smell a bear coming forward.

Bull Market Indicators

High national income

A rise in stock price

Reduced unemployment rates

More and more investors take long positions.

Low-interest rates

Technology is on the boom.

Industrial production statistics are higher.

S&P 500 shows higher lows and higher highs

History of Bull Markets

Here is the list of events and years when the bull was in his full form and bounced the market up in the sky with its full throttle.

Event

Start Date

Months

S&P 500 Percent Change

Recovery from wall street crash

June 1932

57

325%

World War II

April 1942

49

158%

Post War Boom

June 1949

89

266%

Cold War Ramps up

October 1957

50

86%

JFK aims to get America moving again

June 1962

44

80%

The go-go years

October 1966

26

48%

Nifty Fifty

May 1970

32

74%

A Modest Bull

October 1974

74

126%

Reaganomics

August 1982

60

229%

Black Monday Comeback

December 1987

31

65%

Roaring 90s

October 1990

113

417%

Housing Boom

October 2002

60

102%

Long, Slow recovery

March 2009

131

348%

Bottom Line

There are two sides to everything one is positive, and one is negative. People define positive and negative according to their views of living life, and the same concept is applied to bull and bear markets. For some inventors, the bear market is the best opportunity and for some bull is the one. Both play an essential role and are considered beneficial and detrimental according to the perspective of the person.