Securities
Bull Market
A bull market is a financial market condition characterized by rising prices, investor optimism, and expectations of continued gains, typically defined as a 20% or greater rise from recent lows.
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Exam Tip
Bull = UP (horns thrust up). Bear = DOWN (claws swipe down). 20% move defines each.
What is a Bull Market?
A bull market is a period of rising prices in a financial market. The term is most commonly used for the stock market but can apply to bonds, real estate, currencies, and commodities.
Characteristics of Bull Markets
| Indicator | Bull Market Sign |
|---|---|
| Price Trend | Rising prices (20%+ from lows) |
| Investor Sentiment | Optimistic, confident |
| Economic Conditions | Growing GDP, low unemployment |
| Trading Volume | High buying activity |
| Corporate Earnings | Generally increasing |
Bull Market Phases
- Accumulation - Smart money starts buying after a downturn
- Public Participation - General public joins as prices rise
- Excess - Euphoria, speculation, overvaluation
Historical Bull Markets
| Period | Duration | S&P 500 Gain |
|---|---|---|
| 2009-2020 | 11 years | +400% |
| 1990-2000 | 10 years | +417% |
| 1982-1987 | 5 years | +229% |
Why "Bull"?
The term comes from how a bull attacksâby thrusting its horns upward, symbolizing rising prices.
Bull Market Strategies
- Buy and hold quality investments
- Consider growth stocks
- Stay diversified despite optimism
- Be cautious of late-stage euphoria