What Do Market Correction, Market Crash, Bull and Bear Market Mean?
Published / Last Updated on 13/02/2024
We have all heard investment market terms such as market crash, market correction as well as a ‘bear’ market and ‘bull’ market but what do they all mean?
Stock Market Correction or Crash?
- Stock Market Correction (sometimes called a ‘pull back’) is a market fall of -5% but less than 10% in an abrupt/short period of time e.g., a day or a couple of days trading.
- Stock Market Crash is a market fall of 10% or more in an abrupt/short period of time e.g., a day or a couple of days trading.
- An increase of 10% or more for stock markets over a short period is a ‘Reverse Market Crash’.
Bond Market (and Bullion) Correction or Crash?
- Bond Market Correction is a market fall of less than 5% in an abrupt/short period of time e.g., a day or a couple of days trading.
- Bond Market Crash is a market fall of 5% or more in an abrupt/short period of time e.g., a day or a couple of days trading.
- An increase of 5% or more for bond markets over a short period is a ‘Reverse Bond Market Crash’.
Bull or Bear Markets?
Stock Market Bulls and Bears:
- A Bear Market for stock markets is a sustained or expected/forecast market fall of -20% or more over a longer period e.g., 3 months, 6 months, 1 year.
- A Bull Market for stock markets is a sustained or expected/forecast market rise of +20% or more over a longer period e.g., 3 months, 6 months, 1 year.
Bond Market Bulls and Bears:
- A Bear Market for bonds (and bullion) is a sustained or expected/forecast market fall of -10% over a longer period e.g., 3 months, 6 months, 1 year.
- A Bull Market for bonds (and bullion) is a sustained or expected/forecast market rise of +10% over a longer period e.g., 3 months, 6 months, 1 year.
