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Bull market

A sustained rise in prices, commonly a gain of 20% or more from a recent low.

Market BasicsBeginner

Definition

A bull market is a long stretch where prices trend up and sentiment is optimistic. Like the 20% bear market line, the 20% rule is a convention. Bull markets are easiest to identify after the fact.

How it is used

The label helps describe the market regime, which affects how much risk investors choose to take.

Watch out for

Late in a bull market, optimism tends to be highest and valuations tend to be stretched, which is also when risk is easy to overlook.

Example

Historical exampleThe S&P 500 rose about 400% between its March 2009 low and its February 2020 high, the longest bull market on record at that time.

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