The terms “bull” and ”bear” are used to describe conditions in a financial market, with the former used when prices are rising and investor optimism is high, and the latter when the reverse is the case.

The origins are unclear, but it is thought they refer to how the animals attack, with a bull thrusting up its horns and a bear striking downwards with its claws.

While there are no official criteria for when to apply the term “bull”, it is generally accepted that such a market occurs when increases of 20 per cent or more above near-term lows are witnessed.

Stock prices rise with investor confidence on the back of a booming economy, a strong job market and healthy fiscal indicators such as gross domestic product (GDP).

Bull markets generally last for prolonged periods of time, even over many years.

But when the economy encounters difficulties, such as growing jobless figures or looming recession, a bull market becomes heavily pressured, likely leading to a bearish trend.

Three main factors point to whether the market will be “bull” or “bear”: 1) economic factors; 2) supply and demand in securities; and 3) investor psychological factors.

1. Economic Factors

2. Supply and Demand in Securities

3. Investor Psychological Factors

Reference: Price, M. (2023, March 14). The Motley Fool. Bull vs. Bear Market: What’s the Difference?

Prepared by: Department of Research, Training, Securities Market Development and International Relations Securities and Exchange Regulator of Cambodia

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