When it comes to investing, you’ll often hear people talk about bull markets and bear markets. But what do those terms really mean—and why do they matter for your financial future?
Bulls Charge Up, Bears Swipe Down
One of the easiest ways to remember the difference between a bull and a bear market is to picture how each animal attacks.
- A bull attacks by thrusting its horns upward. That will help you remember a bull market refers to an upward, growing market.
- A bear swipes with its claws downward. That will help you remember refers to a market that’s falling.
It’s a simple visual but effective visual. Is that why they are called that, no, the origin is often debated and there is no simple answer why they are called this. However this visual helps simplify, remember and understand them.
Bulls Run Longer and Bears Are Shorter
This picture also helps us understand key differences between the two. Bull markets are typically long and bears are typically short and drop very fast.
With a bull think of the running of the bulls. The bulls can run for long periods of time and although they can hurt people it’s not so scary that 1,000s willing participate in the running. Just like the running of the bulls, bull markets are longer and tend to take longer to increase then bears do to go down.
Bears, on the other hand, attack fiercely and quickly, then retreat. Similarly, bear markets are typically shorter and more abrupt than bull markets. Markets may drop fast, but they don’t usually stay down forever.
What Officially Counts as a Bear Market?
A bear market is generally defined as a 20% decline from a recent market peak, measured from the top (the peak) to the bottom (the trough).
Typically, analysts use the S&P 500 Index as the benchmark to determine if we’re officially in a bull or bear market. But it’s important to remember:
- Other indices, like the NASDAQ or Dow Jones, can experience their own bull or bear cycles.
- Different types of markets—like commodities, bonds, or even specific sectors—may have very different bull and bear periods.
For example, while the S&P 500 narrowly avoided a bear market in 2025, other indices did cross that 20% decline threshold.
A Brief History of Recent Bear Markets
Bear markets don’t happen often. Since 1981, we have experienced only 5 bear markets as defined by the S&P 500.
- 2022: A bear market defined by inflation concerns and interest rate hikes.
- 2020: The COVID-19 pandemic caused the second-fastest bear market in history, but also the shortest.
- 2008: The Global Financial Crisis brought a deep and painful bear market, also known as the Great Recession.
- 2000–2001: The dot-com bubble and the September 11 attacks created prolonged market declines. Some people separate these as two separate bears.
- 1987: Known as “Black Monday,” this was the fastest drop in market history, dropping over 20% in one day.
Bear markets do happen, but they do not happen as often as most people think they do.
Why This Matters for Your Financial Plan
Understanding bull and bear markets isn’t just trivia—it’s an important part of making smart financial decisions.
At Beratung, we don’t believe in trying to “time the market.” Instead, we focus on the value of time in the market. But when bear markets do occur, they create strategic opportunities such as:
- Roth Conversions – Paying taxes while values are temporarily lower.
- Buying Opportunities – Putting cash from the sidelines to work at reduced prices.
- Portfolio Adjustments – Rebalancing or slightly increasing risk to capture long-term growth.
The key is not to panic during a bear market, but to understand how to use it to your advantage.
The Takeaway
Bull and bear markets are natural parts of the financial cycle. While bulls run longer and bears strike faster, both play a role in shaping your long-term investment journey.
The real question isn’t whether we’re in a bull or a bear market today—it’s whether your financial plan is built to thrive through both.
At Beratung Advisors, we help clients prepare for every market condition, ensuring you stay on track no matter what the headlines say.
If you’d like to learn more about how we guide clients through bull and bear markets—and how to take advantage of opportunities during downturns—let’s talk.
Disclosures:
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
All investing involves risk including loss of principal. No strategy assures success or protects against loss.
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