A bull market is a sustained period of time when investment prices are rising in a financial market, while a bear market is a sustained period of time when investment prices are falling. The terms "bull" and "bear" are used to describe how markets are performing, and they are entirely different animals when it comes to the impact they can have on your portfolio and the investment decisions you make. Here are some key differences between bull and bear markets:

Bull Market

• Occurs when the prices of assets in a financial market increase substantially over an extended period of time.
• There are no formal criteria for a bull market, but the most common definition is a period when investment prices rise by at least 20% following two prior distinct periods when prices declined by 20% each.
• Bulls are generally powered by economic strength, rising corporate profits and GDP, and declining unemployment.
• Investors are optimistic and encouraged about the market.

Bear Market

• Occurs when the prices of assets in a financial market decrease substantially over an extended period of time.
• The typical threshold for a bear market is a decline of 20% or more from recent highs, although the term doesn’t have a universal definition.
• Bear markets often occur in periods of economic slowdown and higher unemployment.
• Instead of wanting to buy into the market, investors want to sell, often fleeing for the safety of cash or fixed-income securities.
• Market sentiment is pessimistic.

Its important to note that both bull and bear markets are part of the normal long-term cycle of investing, and investors will encounter both types of markets over time. It is extremely difficult to time either type of market, and those who try to do so are often disappointed and may suffer losses in the process.