bull market

noun

|Updated on: 19 Jun 2018

Definition of bull market

: a market in which securities or commodities are persistently rising in value — compare bear market

See bull market defined for English-language learners

Recent Examples of bull market from the Web

That may sound like a good thing, considering the beating stocks took during the financial crisis, but anyone who didn’t own stocks missed out on the ensuing bull market, one of the best in history.

— Washington Post, "What’s in your 401(k)? For more investors, just 1 fund," 5 June 2018
During the current bull market, the second longest in history, that's a winning hand.

— bill glauber, Milwaukee Journal Sentinel, "How Bill Abt helped Kenosha's Carthage College beat Harvard and others (in investing)," 25 May 2018
During the 1990s bull market, accounts compounded by up to 21 percent a year.

— mary williams walsh, New York Times, "A $76,000 Monthly Pension: Why States and Cities Are Short on Cash," 14 Apr. 2018
And even though the last seven years of that span (2009-15) included a roaring bull market, all told, stocks performed even worse than Buffett predicted.

— shawn tully, Fortune, "Here's What 1999 Warren Buffett Might Say About the 2018 Stock Market," 14 Feb. 2018
Even with these declines, U.S. stocks still are in the midst of history’s second-longest bull market, with the S&P 500 more than quadrupling over that stretch.

— anna-louise jackson, latimes.com, "How to keep your cool in this stock market sell-off," 9 Feb. 2018
Best of all, of the 36 stock market corrections in the S&P 500 since 1950, 35 of those 36 — all but the current correction — have been erased by a bull market rally, often within a matter of weeks or months.

— sean williams, USA TODAY, "5 investing strategies to survive a stock market correction," 4 Apr. 2018
Though the end of the 36-year old bull market in bonds has been called many times before, the latest warnings do not seem like a false alarm.

— tom saler, Milwaukee Journal Sentinel, "Tide may be changing where markets are concerned," 27 Jan. 2018
Wall Street believes the up-or-down movement of its yield is a crystal ball that foretells inflation, recession, bull markets, bear markets, home prices and corporate profits.

— thomas heath, chicagotribune.com, "'High-water mark' comment from Caterpillar executive spooks investors," 25 Apr. 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'bull market.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

First Known Use of bull market

1858

in the meaning defined above

See Words from the same year

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Financial Definition of BULL MARKET

bull market

noun

What It Is

A bull market is a period of several months or years during which asset prices consistently rise. The term is usually used in reference to the stock market, but it can describe specific sectors such as real estate, bonds or foreign exchange. It is the opposite of a bear market, in which securities prices consistently fall.

How It Works

Identifying and measuring bull markets is both art and science.

One common measure says that a bull market exists when at least 80% of all stock prices rise over an extended period. Another measure says that a bull market exists if market indices rise at least +15%. Of course, different market sectors may experience bull markets at different times.

The causes and characteristics of bull markets vary, but most financial theorists agree that both economic cycles and investor sentiment both play a role in the creation and momentum of bull markets. In general, a strong or strengthening economy, indicated by high employment, high disposable income and high business profits usually ushers in a bull market.

Rising investor confidence also indicates a bull market and is perhaps more powerful than any economic indicator. When investors believe something is going to happen (a bull market, for example), their actions can turn it into a self-fulfilling prophecy. Although difficult to quantify, investor sentiment can show up in mathematical measurements like the put/call ratio, the advance/decline line, IPO activity and the amount of outstanding margin debt.

Why It Matters

Regardless of their exact beginnings and ends, bull markets typically have four phases.

In the first phase, prices are low, investor sentiment is low, and investors are pessimistic about future prices. In the second phase, stock prices, trading activity and corporate earnings begin to increase and economic indicators are above average. Investor sentiment also gets more optimistic.

In the third phase, market indexes and many securities reach new trading highs. Trading activity continues to increase, and dividend yields reach historic lows. In the fourth and final phase, there is excessive IPO activity, trading activity and speculation. Stock P/E ratios are also at historic highs. As investors take profits or react to bad news or negative indicators, bull markets generally unravel.

Bull markets usually present a multitude of moneymaking opportunities for investors because prices generally rise across the board. But bull markets don't last forever and they don't always give advance notice of their arrival, so the investor must know when to buy and when to sell to maximize his or her profits. This means the investor must attempt to time the market, or gauge when a bull market has begun and when it is ending.

Analysts spend thousands of hours trying to determine what will trigger the next bull market and how long it will last. Technical analysis is especially prevalent in this effort, although less sophisticated indicators such as hemline fashions or the NFL division of the last Super Bowl winner also provide fodder for such predictions.

For details on the history of the words that describe market trends, read The Quirky And Brutal Origins Of The Terms 'Bear' And 'Bull.'

Source: Investing Answers