Bull Market
Definition
A financial market condition where prices are rising or expected to rise, typically defined as a 20% or greater increase from recent lows, accompanied by optimism and investor confidence.
A bull market is a sustained period of rising prices and positive investor sentiment. While the technical definition is a 20%+ rise from a recent low, the broader meaning encompasses the economic optimism, increased participation, and risk appetite that characterize these periods.
Bull markets in stocks have historically lasted much longer than bear markets. The average bull market since 1950 has lasted about 5 years with an average gain of 178%. The longest bull market in US history ran from March 2009 to February 2020 — nearly 11 years with a 400%+ gain in the S&P 500.
In crypto, bull markets tend to be shorter but more dramatic. Bitcoin has experienced several major bull runs with 1,000%+ gains followed by 80%+ drawdowns. The crypto market's relative immaturity and higher retail participation create more volatile and emotionally driven cycles.
Understanding where you are in a market cycle helps with decision-making but timing the market precisely is extremely difficult. Most investors are better served by maintaining a consistent investment strategy through both bull and bear markets rather than trying to switch between aggressive and defensive positioning.
Key characteristics of late-stage bull markets include widespread media coverage of investment gains, new investor participation surging, increasing use of leverage and margin, valuations reaching historical extremes, and the widespread belief that "this time is different." These signs suggest caution but don't predict exact timing.
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Frequently Asked Questions
How do I invest during a bull market?
Continue your regular investment plan — don't chase performance or take excessive risk because markets are rising. Consider rebalancing if your allocation has drifted significantly toward stocks. Avoid the temptation to concentrate in the hottest sectors, and remember that bull markets don't last forever.
How long do bull markets typically last?
The average bull market since 1950 has lasted about 5 years, but there's enormous variation — from less than a year to over 10 years. For crypto, bull cycles have historically lasted 1-2 years. Past duration doesn't predict future duration.