Markets · 3 min read
Bull and Bear Markets
Markets move in cycles. A bull market is a sustained rise; a bear market is a 20%+ decline.
Why it matters
Recognizing cycles emotionally, not predicting them, is what protects long-term investors.
Advantages
- Buying opportunities in bear markets
- Bull markets grow wealth
Risks
- Chasing tops
- Panic selling at bottoms
Real-world example
Historically, staying invested through bear markets has outperformed trying to time exits and re-entries.
Key takeaways
- Bear markets are normal, not the end
- Automate investments to remove emotion
- Have cash to deploy in downturns
Quick quiz
1. A bear market is defined as a decline of at least: