What is a Bear Market | What County

What is a Bear Market

Would you have known? If there are signs of falling prices on the stock market over a longer period of time, this is called a bear market. Another term for it is the French word “bearish”, which translates as “decrease” or “decline”. In contrast, one speaks of a bull market or a “bull market” (fr. for “upswing” or “rise”), when prices rise. As Thomas Kehl from the financial portal Finanzfluss explains in his YouTube financial dictionary, the terms “crash” and “rally” are also used to describe the price movements in the bear and bull markets.

What is a Bear Market
What is a Bear Market
Bear Market
Bear Market

Where did the terms bull and bear come from?
The names bull and bear have existed since the 17th century. Writer Joseph de la Vega compared the events on the stock exchange with the fighting behavior of the two animals: a bull thrusts its horns from the bottom up, a bear beats its paw from the top down. Not only the market itself can behave “bullish” or “bearish” – investors can also be either optimistic or pessimistic and emulate either the bull or the bear.

How do I recognize a bear market?
When the bear market begins can only be determined with hindsight. There are always valleys or crises on the stock market, and downward price corrections can also occur in a bull market. However, there are certain features that indicate a bear market:

The 20 percent rule – One speaks of a bear market, for example, “when the markets have fallen by about 20% in the last two months,” explains financial expert Kehl.
The 2 percent rule – If you look at the period from the last price high to the absolute low and the price loses at least 2% in value every month, the time is considered a bear market.
The one-third/two-thirds rule – if two-thirds of the price decline has occurred within the last third of a period called a bear market, one actually only speaks of a bear market

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