What is the difference between a bear market and a bull market?

Economists define a bear market as a decline of 20% or more of a major stock market index, such as the DJIA or S&P 500, for a sustained period. A bear market is the opposite of a bull market, a period marked by market gains of 20% or more. On average, bear markets occur every 3.5 years, usually lasting for several months.

What causes a bear market?

A bear market is often caused by a slowing economy and rising unemployment rates. During this period, investors generally feel pessimistic about the stock market’s outlook, and the changes in the stock market may be accompanied by a recession. But a bear market doesn’t always indicate that a recession is coming.

How long does a bear market typically last?

As opposed to bull markets, bear markets tend to be shorter and last for 349 days on average, whereas growing markets can go on for around 1,764 days. The market generally spends more time in a bull phase than a bear phase, meaning that the market or economy is growing more than contracting.