The Animals of Wall Street

Bulls charge and bears hibernate. Remembering that phrase can help you understand the difference between a bull market and a bear market. Generally speaking, investments perform well during a bull market and are stagnant or lose value during a bear market.

Bull market. A bull market is earmarked by rising securities prices and  positive market performance over a period of months or years. Investor confidence and optimism that the upward trend will continue usually accompany a bull market and often signal a strengthening economy.

But what goes up must come down, so a bull market is often followed by a

Bear market. A bear market is a decline of 20% or more, generally lasting 60 days or longer, in any broad equity index — such as the Dow Jones Industrial Average®, the S&P 500®, or the NASDAQ. A downturn in the economy, often associated with high unemployment and rising inflation, may lead to investor pessimism and a decreasing demand for stocks.

The good news. Instead of worrying over bull or bear markets, remember that having a long time horizon until retirement may help you ride out any market downturn. While past performance is no guarantee of future results, historically, the stock market has always recovered its losses over the long term.

This newsletter is designed to provide useful information about retirement plans and investing your plan account savings. While the information contained herein was obtained from reliable sources, it cannot be guaranteed as to completeness or accuracy. Before acting on any of the information provided, consult your professional advisor.

FR2017-1010-0101/E Copyright 2017 by DST Systems, Inc.