A bull market tends to be associated with increasing investor
confidence, motivating investors to buy in anticipation of further
capital
gains. The longest and most famous bull market was in the 1990s
when the U.S. and many other global financial markets grew at their
fastest pace ever.[4]
In describing financial market behavior, the largest group of
market participants is often referred to, metaphorically, as a
herd. This is especially relevant to
participants in bull markets since bulls are herding animals. A
bull market is also described as a bull run. Dow Theory attempts to describe the character of
these market movements.
The United States has been described as being in a long-term
bull market since about 1983, with brief upsets including the Panic
of 1987 and the NASDAQ
crash of 2000.
A bear market is described as being accompanied by widespread
pessimism. Investors anticipating further losses are motivated to
sell, with negative sentiment feeding on itself in a vicious circle. The most famous bear market in
history was after the Wall Street Crash of 1929 and lasted from 1930 to
1932, marking the start of the Great Depression.[5] A milder, low-level long-term bear market
occurred from about 1967 to 1983, encompassing the stagflation economy, energy crises in the 1970s, and
high unemployment in the early 1980s.
Prices fluctuate constantly on the open market; a bear market is
not a simple decline, but a substantial drop in the prices of a
range of issues over a defined period of time. By one common
definition[attribution needed], a bear market
is marked by a price decline of 20% or more in a key stock market index from a recent peak over a
12-month period. However, no consensual definition of a bear market
exists to clearly differentiate a primary market trend from a
secondary market trend.
Investors frequently confuse bear markets with corrections.
Corrections are much shorter lived, whereas bear markets occur over
a longer period with typically a greater magnitude of loss from top
to bottom.
