A bull market is characterised by rising prices and positive investor sentiment, and a bear market by falling prices and negative investor sentiment.
The origin of these terms isn’t known, but according to one theory bulls are associated with upward movements because they attack their prey by swinging their horns upwards.
On the other hand, bears are linked to downward movements because they attack by swiping their paws downwards.
Bull markets are driven by positive economic indicators, low unemployment rates, and overall optimism about the future condition of the market.
Bear markets are generally triggered by economic recessions, geopolitical tensions, and financial crises.
In a bull market, investors buy stocks with the expectation that prices will continue to rise and will lead to profits.
In a bear market, investors often sell stocks to minimise losses or to shift towards safer investments, expecting a decline in prices.