Glossary
Bull market
A sustained rise in a major index, commonly dated from a 20% gain off a bear-market low, accompanied by optimism.
A bull market is an extended period of rising prices in a broad market, usually measured by the S&P 500. By the most common convention, a new bull market is confirmed once an index has climbed 20% from its bear-market low, and it is then dated back to that low. Bull markets have historically lasted much longer than bear markets, which is a large part of why stocks have rewarded patient long-term holders.
How one is measured
Unlike a bear market, there is no single agreed rule for when a bull market ends; the usual practice is that it ends at the peak that precedes the next 20% decline. Data providers can therefore disagree about dates and durations, and some count a sharp but brief drop such as the one in late 2018 (just under 20% on a closing basis) as a correction within a bull market.
What tends to accompany them
Bull markets typically ride on growing corporate earnings, an expanding economy and, often, falling or low interest rates. Investor sentiment gradually shifts from skepticism to confidence, and late in a long advance to enthusiasm, when valuations can stretch well beyond historical averages. Pullbacks of 5% to 10% are normal along the way.
Some caution about the term:
- Rising prices do not make every stock a winner; leadership often narrows to a few sectors or very large companies.
- "Bullish" simply means expecting prices to rise, about any asset, from a single stock to gold.