Only two sentiments available in a stock market are bullish and bearish. While simply put, bull market represents the upward trend and bear market represents the downward trend, there are much more insights about these two terms.
Bull market corresponds to strong demand and weak supply. As more and more investors are willing to buy and make money, only few investors are ready to sell their securities. The strong demand and competitions pushes the share prices higher and higher. The reverse is true with bear market. A bear market is characterized by strong supply and weak demand. As the market tends downwards, investors want to sell their equity quickly while mostly no one desires to buy at this time.
Bull market is associated with positive investor sentiments while bear market indicates negative psychology of investors when most of the investors prefer fixed-income securities over stock market and equities.
Bull market accompanies strong economy, high employment rate and most business record huge profits. On the contrary, bear market is accompanied by weak economy, high unemployment rate and decline in profits for corporates.
In the bull market, there is a greater chance to make quick and easy money for an investor. The earlier the trends are identified, the higher the returns can be achieved. It is difficult to actually make profit in a bearish market. The most sustainable strategy is to divert your fund to fixed-income securities, defensive stocks or evergreen segments like utilities.