Rising stock prices and positive sentiment characterize a bull market. The opposite is true of a bear market. A shift from bull to bear, technically, is said to occur when there is a fall of more than 20% from the recent peak. The opposite change moves a market from bear to bull.
As a mutual fund investor, these terms may mean little to you. This is because you are not trading in the market but investing for the long term. However, the conservatism of fund managers can act as a drag on fund performance during market recoveries and bull phases, according to a study by S&P Dow Jones Indices that was published in 2017. The study, which mapped the 10-year period between 2006 and 2016, also showed that the effect of fund managers’ strategies is the strongest when the market is in recovery mode. As a slow recovery gathers pace in the Indian market at present, the findings of the study gain significance.
