MARKET MOODS: BULLS, BEARS, & EVERYTHING IN BETWEEN
- laurengage
- Apr 25
- 3 min read
Updated: Apr 30
Understanding the market's ups, downs, and how people feel about it all!
If you’ve spent any time around investing content, you’ve probably heard the terms bull market and bear market thrown around — maybe even corrections, rallies, and recessions too. It can feel like Wall Street has its own language (and honestly, it totally does). But knowing what these terms mean — and how they impact investor emotions — can help you stay cool when things get crazy.
In this post, we’ll break down the different market phases, how they affect how people feel about investing, and what you should do in each phase.
The Main Market Phases
Let’s start with the basics. Markets don’t move in straight lines — they move in cycles. There are a few key phases you should know about:
Bull Market
This is the best one. A bull market is when prices are rising consistently — usually by 20% or more from a previous low. The economy’s strong, unemployment is low, and everyone seems excited to invest. People are optimistic, portfolios are growing, and investing volume is rising. This can also be considered the markup phase, where prices increase quickly.
Bear Market
This is when things get rough. A bear market happens when prices fall 20% or more from a recent high. Investors get nervous, headlines sound apocalyptic, and there’s a lot of talk about recessions. Fear tends to take over — and people start pulling money out of the market out of panic. The selling ends up driving even lower prices.
Market Correction
A correction is a shorter-term drop in the market — typically a 10% decline from recent highs. It’s not as intense as a bear market, but it’s enough to shake people up. Corrections are super common and often healthy — they cool things off when prices have been climbing too fast.
Recovery/Expansion
After a dip, the market starts to rebound. Companies adjust, investors regain confidence, and things start moving back in a positive direction. It’s like the “getting back on track” phase — and it often signals the start of a new bull run. Prices are low and people are cautious, but the situation is improving.
Investor Sentiment: Why Feelings Matter
Every market phase is unique, and how people feel can actually affect what the market does next!
During bull markets, confidence is high. People are more willing to take risks, invest more aggressively, and chase returns. Sometimes too aggressively.
During bear markets, fear takes over. People sell off investments, sit on cash, and panic about what’s next. This can actually make the market drop further.
In corrections, investors are split. Some see opportunity; others see warning signs.
In recoveries, hope starts to creep back in — but people might still be cautious from the last downturn.
This emotional rollercoaster is called investor sentiment — and while feelings can’t predict the market, they definitely influence short-term moves.
What You Should Do in Each Market Phase
Whether we’re in a bull run or a bear dip, the core principles stay the same:
Stay Consistent
Keep contributing regularly to your investments. Don’t stop just because the market feels weird.
Zoom Out
Long-term investors don’t need to stress about short-term phases. The market has always recovered — even from the worst crashes.
Avoid Emotional Decisions
Don’t chase hype in bull markets or run for the hills in bear ones. Stick to your plan.
Use Down Markets as an Opportunity
In bear markets and corrections, you’re basically getting stocks “on sale.” If you have a long timeline, that’s a win.
Markets change. That’s what they do. Sometimes we’re in a bull run and everything feels great. Sometimes it’s a bear market and people panic. But these phases are normal — and temporary.
If you keep a long-term mindset, stay consistent, and don’t let emotions drive your decisions, you’ll be way ahead of the game.
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