The terms "bull market" and "bear market" describe the prevailing direction of a market. A bull market is characterised by rising asset prices, improving economic conditions, and strong investor confidence. The conventional definition is a period where prices have risen 20% or more from a recent trough.
A bear market is the opposite — a sustained decline of 20% or more from a recent peak, typically accompanied by deteriorating economic conditions, falling corporate earnings, and negative investor sentiment. Bear markets can last months to years and often coincide with economic recessions.
Individual stocks can also be in bull or bear trends independent of the overall market. A stock might be in a "personal bear market" even while the ASPI is rising, if the company's fundamentals are deteriorating.
Understanding market cycles helps long-term investors avoid panic selling at market lows and excessive exuberance at market peaks. Historical analysis of the CSE's ASPI shows the index has experienced multiple full bear and bull market cycles since its inception.