"Bull" and "bear" are shorthand for the two dominant directions a market can trend in over an extended period.
Bull markets
A bull market describes a sustained period of rising prices, often accompanied by improving economic data, rising corporate earnings, and generally optimistic investor sentiment. Bull markets can last for years, though they are periodically interrupted by shorter-term pullbacks.
Bear markets
A bear market describes a sustained period of declining prices — commonly defined as a drop of 20% or more from a recent high — often coinciding with slowing economic growth, deteriorating corporate earnings, or broader uncertainty.
Why the distinction matters
Recognizing which broad environment you may be in can inform expectations around volatility and risk, even though no one can reliably predict exactly when a cycle will turn. Long-term investors often use these cycles as a reminder of why diversification and a defined time horizon matter.
