Bull Market
A bull market is a prolonged period of rising asset prices, typically defined as a 20% or greater rise from a recent low. Bull markets are driven by economic expansion, rising corporate earnings, and investor optimism.
The term originates from the way a bull attacks — thrusting its horns upward. Bull markets can last years: the US experienced a bull market from 2009 to 2020 (the longest on record) and again from late 2022 onward.
The average bull market lasts about 4–5 years and produces gains of 150–200%. However, even within a bull market there are corrections (10–20% pullbacks), which can feel alarming but are historically normal and temporary.
Investing during a bull market feels easy — nearly everything goes up. The psychological challenge is avoiding overconfidence, maintaining diversification, and not abandoning your asset allocation when prices seem "too high." Dollar-cost averaging helps by removing the pressure to time the market.
Related terms
- Bear Market
- A bear market is a prolonged decline in asset prices — commonly defined as a 20% or greater fall from a recent peak, sustained for at least two months. Bear markets are associated with recessions, declining corporate earnings, or systemic financial stress.
- Volatility
- Volatility measures how much an investment's price fluctuates over time. High volatility means large, unpredictable price swings; low volatility means stable prices. Standard deviation is the most common volatility measure; the VIX index measures expected S&P 500 volatility.
- Index Fund
- An index fund is a portfolio of stocks or bonds designed to replicate the performance of a market index, such as the S&P 500. Index funds have lower fees than actively managed funds because no stock-picking is required.
- Dollar-Cost Averaging (DCA)
- Dollar-cost averaging is an investment strategy where you invest a fixed dollar amount at regular intervals, regardless of price. It reduces the risk of investing a large sum at the wrong time.