Bull Market

A sustained market rise of 20% or more from a recent trough, typically characterized by strong investor optimism, rising earnings, and broad participation.

A bull market begins when prices rise 20% from a bear market low and ends when prices fall 20% from the subsequent peak. More loosely the term describes any prolonged period of rising prices, strong sentiment, and favorable economic conditions. Bull markets are fueled by rising corporate earnings, accommodative monetary policy, strong GDP growth, and investor willingness to pay higher multiples for future cash flows.

The longest bull market in US history ran from March 2009 to February 2020 — nearly 11 years — as the S&P 500 rose over 400%. It was powered by historically low interest rates, steady GDP growth, expanding profit margins, and massive share buyback programs. The 1990s bull market, driven by the internet revolution and fiscal discipline, was similarly extended and powerful.

Bull markets tend to end for one of three reasons: the economy tips into recession, the Fed overtightens, or valuations reach levels where the priced-in growth cannot possibly be achieved. Near the end, investor complacency typically rises (VIX falls), speculative activity increases, and market breadth often narrows as gains concentrate in fewer and fewer names.

This definition is for informational and educational purposes only. Nothing on Finance Compass constitutes financial, investment, or trading advice. Always conduct your own research and consult a qualified professional before making financial decisions.