Bull Market

A market in which share prices are rising, thereby encouraging buying.

A market, instrument or sector that is on an upward trend is generally described as a bull market, on the basis that ‘bulls’ – speculators that believe a market is on an upward trajectory – are seen as being in control. Bull markets are usually characterised by widespread optimism and confidence, with positive news driving gains higher.

Who are ‘bulls’?

Bulls are known for their tendency to buy or go long on their market, with the aim of selling when the investment is worth more in the future. A bull market is the opposite of a bear market, which is a market on a sustained downward trajectory, where more pessimistic traders – ‘bears’ – are in control.

Practical Application Example

“ Various financial markets may go through periods as bull markets, including commodities, shares, currencies and indices. The most prolific bull market in modern American history occurred between the end of the stagflation era in 1982 and the dotcom bust in 2000, and saw the Dow Jones Industrial Average (DJIA) deliver 16.8% average annual returns. ”