It is important to understand that the stock market will invariably change from time to time for a variety of reasons. Sometimes it will experience economic downturns or upturns as a direct result of what is happening in the world. Just as a person would respond to the world around them, so does the market. It's all a part of investing.
Bear Market
A Bear Market refers to a significant decline in stock prices of 15-20 percent or more, coupled with a high degree of pessimism. Clearly, this is not a good time for any investor. However, there is always light at the end of the tunnel. There are many investors who purchase low during the bearish period in hopes of prices rising in the future.
Bull Market
A Bull Market refers to a significant increase in stock prices of 10-15 percent or more. A Bull Market is usually characterized by optimism, investor confidence and the expectation that strong growth will continue. Bull Markets often occur as a result of economic recovery, an economic boom or investor psychology.
