Bull Market

Financial Dictionary -> Investing -> Bull Market

Although it is usually applied to the stock market, the term Bull Market can be applied to any widely traded bond, currency, commodity or financial security. It essentially means the group of securities or market in question is forecasted to rise or is in the middle of an upswing, with prices and overall market value rising. Think of it like a bull all of a sudden charging forwards and thrusting its horns in to the air. Bull Market is most commonly used by analysts, financial experts, investors and news outlets to refer to the direction of the stock market, and it will generally be discussed during an economic growth period.

There are various factors that will cause a bull market, but it usually begins with a combination of investor confidence (lots of money is being put in), general economic optimism (the general public are pleased with the economy), and positive forecasts that the market is strong and will continue to be strong in the coming months. It is best for an investor to buy shares prior to a bull market so their value goes up. Buying during a bull market or at the tail end may end up causing a loss in stock value for the investor as the market goes back down.

Because a lot of what feeds the stock market is speculation, hype and 'sheep following' (everyone jumping on the bandwagon), a bull market doesn't necessarily mean things are good, just that the majority of people think it is good. Like a bull that stops, starts and changes direction, the fluctuation in a bull market can be quick, and things can come crashing down just as fast as they went up.

The most recognized bull market to date was during the 1990s when the United States stock market grew at an exponential rate.

Bull Market is the opposite of Bear Market, both of which are metaphors for animal characteristics.