Bull and bear markets

The lesson in full

You'll hear it on the news: "stocks enter a bear market". Bull and bear are names for the market's big moods: rising for a long time, or falling hard.
A bear market is a fall of 20% or more from a recent high. A bull market is a long rise, often counted from a 20% gain off a low.
S&P 500, 2007 to 2013 (monthly averages). From October 2007 to March 2009 it fell about 57% from top to bottom. It only got back above the old high in 2013.
In 2020 the S&P 500 fell about 34% in five weeks, from 19 February to 23 March. By August it was at a new high. Some bears are short and sharp.
On average, bulls last much longer. In the US, bull markets have usually run for several years, bear markets about a year or less. The bull market from 2009 to 2020 lasted about 11 years.
Common mistake
Myth: "Sell everything when a bear market starts." Nobody can call the bottom, and some of the best days come in the middle of bear markets. Many long-term investors keep investing through them.
Key takeaway
Bull: up 20% or more from a low. Bear: down 20% or more from a high. Bears hurt, but historically bulls have lasted much longer.

A bear market is a fall of at least... 20% from a highThe common definition is a drop of 20% or more from a recent peak.
Historically, US bull markets have usually lasted... Longer than bear marketsBull markets have usually run for years, while bear markets tend to last about a year or less.
In 2020 the S&P 500 fell about 34%, then... Hit a new high within monthsIt bottomed on 23 March 2020 and was back at a record high by August.
An index falls from 5,000 to 3,900. Is that a bear market? Yes, it fell 22%The drop is 1,100 points, and 1,100 divided by 5,000 is 22%, past the 20% line.