Bull vs Bear Market: Complete Guide

Are We In a Bull or Bear Market?

The gauge below shows the current S&P 500 drawdown from its 52-week high. A drawdown under 10% suggests a bull market, 10-20% indicates a correction, and over 20% signals a bear market.

What Is a Bull Market?

A bull market is defined as a sustained period during which stock prices rise 20% or more from a recent low. Bull markets are driven by strong economic growth, rising corporate earnings, low unemployment, and investor confidence. The term "bullish" describes an optimistic outlook on stock prices.

Since 1950, there have been 13 bull markets in the S&P 500. The average bull market has lasted approximately 4.4 years (52 months) and delivered a cumulative return of +155%. The longest bull run in history stretched from March 2009 to February 2020 — lasting an extraordinary 131 months with a total gain of +400%.

Key Characteristics of a Bull Market

• Rising stock prices — broad indices gain 20%+ from recent lows
• Economic expansion — GDP growth, low unemployment, rising consumer spending
• High investor confidence — increased trading volume and IPO activity
• Falling or stable interest rates — accommodative monetary policy
• Strong corporate earnings — companies consistently beat expectations

What Is a Bear Market?

A bear market is defined as a decline of 20% or more from a recent high in a major stock index like the S&P 500. Bear markets are typically triggered by economic recessions, rising interest rates, geopolitical crises, or financial system shocks. The term "bearish" describes a pessimistic market outlook.

Since 1950, there have been 12 bear markets in the S&P 500. The average bear market has lasted approximately 11.3 months with an average decline of -34%. The deepest bear market was the 2007-2009 financial crisis, which saw the S&P 500 fall -57% over 17 months. The shortest was the COVID-19 crash of March 2020 — lasting just one month.

Key Characteristics of a Bear Market

• Falling stock prices — broad indices decline 20%+ from recent highs
• Economic contraction — rising unemployment, falling GDP, reduced spending
• Investor fear and pessimism — flight to safe-haven assets like bonds and gold
• Rising volatility — VIX spikes, extreme daily swings
• Tightening credit conditions — banks restrict lending, spreads widen

Bull vs Bear Market Comparison

Here is a side-by-side comparison of the key differences between a bull market and a bear market based on S&P 500 data since 1950.

Historical Bull & Bear Markets Since 1950

Every bull and bear market cycle in the S&P 500 since 1950, listed chronologically. Bull markets are shown in green, bear markets in red.

Bull & Bear Market Duration Chart

This horizontal bar chart compares the duration in months of every bull and bear market since 1950. Notice how bull markets consistently last far longer than bear markets.

S&P 500 Bull & Bear Market Periods

A stylized view of S&P 500 levels over time with green shading for bull markets and red shading for bear markets. This visualization shows how the market spends far more time rising than falling.

Key Bull vs Bear Market Statistics

Understanding these numbers helps put market cycles in perspective. Bull markets are longer, stronger, and more frequent than the declines that separate them.

• Average bull market duration: 4.4 years (+155% return)
• Average bear market duration: 11.3 months (-34% return)
• Longest bull market: 131 months, March 2009 – February 2020 (+400%)
• Deepest bear market: October 2007 – March 2009 (-57%)
• Shortest bear market: February – March 2020 (1 month, -34%)
• Bull markets since 1950: 13 (including current)
• Bear markets since 1950: 12
• Time spent in bull markets: ~78% of the time since 1950

What to Do in a Bull vs Bear Market

Different market environments call for different investment strategies. Here is what seasoned investors typically do during each phase of the market cycle.

5 Key Insights About Bull & Bear Markets

1. Bull markets last 4× longer than bear markets. Since 1950, the average bull market has lasted 52 months versus just 11.3 months for bears. The stock market spends roughly 78% of its time in bull territory.
2. Bear markets are a normal part of investing. There have been 12 bear markets since 1950 — roughly one every 6 years. They are painful but temporary, and every single one has been followed by a new bull market.
3. Missing the best days is costlier than riding out the worst. The market's best single-day gains often occur during bear markets. Investors who stay invested through downturns capture the recovery, while those who sell often miss the rebound.
4. Bull market gains far exceed bear market losses. The average bull delivers +155% while the average bear takes back -34%. Over time, this asymmetry is why equities build wealth for patient investors.
5. No one rings a bell at the top or bottom. Market timing is notoriously difficult. A consistent, disciplined investment approach — like dollar-cost averaging — has historically outperformed attempts to predict market turns.

Frequently Asked Questions