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Glossary entry · Trade-offs
Bull & bear market
Definition
A bull market is a sustained period of rising prices, typically defined as +20% off recent lows. A bear market is the opposite: a sustained -20% drawdown. The names come from how each animal attacks — bulls thrust upward with horns, bears swipe down with paws.
Example
The S&P 500 entered a bear market in early 2022 (-25%) and a new bull market a year later.
Related
Trade-offs
Risk
The chance that an investment loses value — and how much it could lose.
Read →Volatility
How wildly an investment's price moves up and down. High volatility = bigger swings.
Read →Diversification
Spreading money across many different things so no single one can sink you.
Read →Drawdown
How far an investment falls from its peak before recovering. The pain measure.
Read →