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published-date Published: October 7, 2023
update-date Last Update: November 9, 2023

Bull market

What’s a Bull Market?

A bull market is when prices in the stock market keep going up, and everyone thinks they’ll keep rising. This term isn’t just for stocks, though—it can also be about bonds, real estate, currencies, or commodities. These good times can last months or even years.

Quick Facts on Bull Markets

  • People feel good about investing, which makes prices go up.
  • Spotting a bull market isn’t easy until it’s already happening.
  • A typical sign of a bull market is when stock prices go up 20% or more.

Why Bull Markets Happen

Bull markets often start when the economy’s doing well—like when companies are making more money and fewer people are out of work. People start to feel confident about investing, so they buy more stocks. New companies often start selling shares too, and all this buying pushes prices up.

Traits of a Bull Market

  • Lots of people are trading stocks.
  • Stocks cost more because people are willing to pay extra.
  • It’s easier to buy and sell because more people want to trade.
  • Companies might give out bigger dividends, and more new companies join the market.

Bull Market vs. Bear Market

A bear market is the opposite: prices are falling, and people are feeling negative about investing. Think about the animals: a bull throws things up with its horns, while a bear swipes down.

How to Make the Most of a Bull Market

Here’s what you can do:

  • Buy and Hold: Get stocks and keep them because you believe they’ll be worth more later.
  • Increase and Hold: Buy more stocks as prices rise.
  • Buy on Dips: When prices fall a bit, buy more before they go up again.
  • Full Swing Trading: This is for the pros—buying and selling quickly to make profits, even betting on prices to fall sometimes.

Famous Bull Markets

  • The 1920s had a huge one, with lots of speculation and economic boom.
  • Japan’s economy flew high in the 1980s.
  • The 1980s in the US, with tech companies doing really well.
  • The dot-com bubble of the 1990s, when internet companies were all the rage.
  • The longest one on record was from 2009 to 2020, thanks to strong company profits and low-interest rates.

The Bottom Line

A bull market is a happy time for investors, with prices climbing and the economy usually growing strong. It’s a great time to invest, but it’s important to watch out for when the market might turn the other way.