In a bear market investor sentiment is generally negative, characterized by fear, pessimism, and a lack of confidence in the market. Conversely, in a bull market, investor sentiment is positive, driven by optimism, confidence and a belief that stock prices will continue to rise.
A
bear market often coincides with a weakening economy or an economic recession.
The negative sentiment in the market reflects concerns about declining
corporate profits, rising unemployment and slower economic growth. Conversely,
a bull market is often associated with a strong economy characterized by robust
GDP growth, low unemployment, and healthy corporate earnings.
|
Aspects |
Bear
Market |
Bull
Market |
|
Market
Sentiment |
Negative |
Positive |
|
Price
Trends |
Failing
Prices |
Rising
Prices |
|
Investor
Behavior |
Cautious,
selling stocks |
Risk-taking,
buying stocks |
|
Economic
Outlook |
Weaking
economy, recession |
Strong
economy, growth |
|
Volatility |
High |
Low |
|
Trading
Volume |
Often
higher |
Often lower |
|
Investor
Psychology |
Fear,
Pessimism |
Confidence,
optimism |
|
Investment
Strategies |
Focus on
Preservation, safe assets |
Focus
on growth, risker assets |
|
Market
Performance |
Declining, below
recent highs |
Rising, often
reaching new market highs |