Definition
Bull markets are characterized by strong price momentum, expanding valuations, robust earnings growth, and rising investor confidence. They typically last several years — the average post-WWII US bull market lasts about 5 years and delivers 175%+ cumulative returns. Bull markets are usually driven by some combination of accommodative monetary policy, expanding corporate profits, technological innovation, or structural economic tailwinds. Late-cycle bull markets often show valuation stretch (elevated P/E ratios) and speculative behavior. The 'bull' metaphor comes from how a bull attacks by thrusting its horns upward — opposite of the bear which swipes downward.
Example
The US bull market from March 2009 to February 2020 lasted 132 months, making it the longest in modern history. The S&P 500 rose from ~676 to ~3,386 — a cumulative gain of about 400% before COVID ended the run.
Frequently Asked Questions
How is a bull market officially defined?
The most common rule of thumb is a 20% or greater rise in a major index from recent lows, sustained over months. There is no formal committee that declares bull markets — the classification is retrospective.
How long do bull markets typically last?
US bull markets since WWII have averaged about 5 years, with cumulative returns of around 175%. The record was March 2009–February 2020 at nearly 11 years.
Should I sell my stocks near the end of a bull market?
Timing tops precisely is famously difficult. Most academic research supports staying invested through cycles and rebalancing periodically rather than attempting to exit at peaks.