What Wall Street’s bull statue can teach investors
If you’ve spent any time reading investing news, you’ve probably seen the terms bull market and bear market thrown around.
Markets are bullish. Markets are bearish. A bull run is underway. A bear market is looming.
But what do these terms actually mean, and why do investors pay so much attention to them?
What is a bull market?
A bull market is generally defined as a period when share markets rise by 20% or more from recent lows.
Bull markets are often associated with:
- Rising share prices
- Strong investor confidence
- Economic growth
- Positive headlines
- Optimism about the future
During a bull market, it can feel like investing is easy. Portfolios grow, markets hit new highs, and it seems like every investment decision is a good one.
But bull markets don’t last forever.
What is a bear market?
A bear market is generally defined as a period when share markets fall by 20% or more from recent highs.
Bear markets are often associated with:
- Falling share prices
- Negative headlines
- Economic uncertainty
- Increased market volatility
- Lower investor confidence
When markets are falling, it’s natural to feel uncomfortable. Watching the value of investments move lower can make even experienced investors nervous.
But bear markets are also a normal part of investing.
Why are they called bulls and bears?
No one knows exactly where the terms originated, but the most common explanation relates to how the animals attack.
A bull thrusts its horns upward, representing rising markets.
A bear swipes its paws downward, representing falling markets.
Simple, memorable, and surprisingly effective.
Ever wondered why there’s a giant bronze bull near Wall Street?
The famous Charging Bull statue has become a symbol of optimism and confidence in financial markets. Just like the term “bull market”, it represents the idea of markets pushing higher over time.
It’s a reminder that while markets may experience ups and downs, investors have historically looked beyond short-term movements and focused on the long term.
The thing many investors forget
Bull and bear markets often get a lot of attention because they’re easy headlines.
But markets don’t send invitations before they change direction.
The challenge is that by the time everyone is talking about a bull market, much of the growth may have already happened. Likewise, when everyone is talking about a bear market, markets may already be well below previous highs.
That’s one reason many long-term investors focus less on predicting market movements and more on staying invested consistently.
What history tells us
While every market cycle is different, history shows that both bull and bear markets are temporary.
Markets have experienced recessions, financial crises, geopolitical events and periods of uncertainty.
Yet over the long term, markets have repeatedly recovered and continued to grow.
That doesn’t mean future performance is guaranteed. It simply highlights that market ups and downs are a normal part of investing.
What can investors do during a bear market?
While it can be tempting to react to market declines, many investors choose to focus on the things they can control:
- Investing regularly
- Maintaining a long-term perspective
- Staying diversified
- Avoiding emotional decisions
- Reviewing their goals
For investors who contribute regularly, lower market prices can also mean their investments purchase more units than they would during periods when prices are higher.
The bull and bear necessities
Bull markets can feel exciting.
Bear markets can feel uncomfortable.
But both are simply different phases of the investing journey.
Rather than trying to predict exactly when markets will rise or fall, many successful investors focus on building consistent habits and keeping their long-term goals front of mind.
Because while markets may change direction, a disciplined investing approach doesn’t have to.
Time in the market may matter more than timing the market.
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Important Information
This blog has been issued by Instreet Investment Limited (ACN 128 813 016 AFSL 434776) as Responsible Entity of the Raiz Invest Australia Fund (ARSN 607 533 022) and has been prepared without taking into account your objectives, financial situation or needs. Before acting on such information, you should conduct your own review or consult a financial advisor before making a decision to invest. Please read the relevant Product Disclosure Statement and any associated reference documents before making an investment decision. In accordance with the Design and Distributions Obligations, we maintain Target Market Determinations for our Funds. All documents can be found on the Raiz website www.raizinvest.com.au, or calling the Customer Support team on 1300 754 748. Please note that past performance is not a reliable indicator or guarantee of future performance. Historical returns, forecasts, and market commentary are provided for general informational purposes only. All investment carries risk and may result in loss of capital.
