This article defines the term "bull market," provides examples of bull markets throughout history, and discusses the implications of bull markets for different sorts of investors.

What Is a Bull Market?

A bull market is a time of expansion. The opposite of bear market, it’s a period in which stock prices on major indexes like the S&P 500 or the Dow Jones Industrial Average are rising. This is typically a time when the economy is growing, consumer confidence is high, and people are spending.

Using market data to identify trends (a practice known as technical analysis), analysts have quantified an official bull market as a period when the S&P 500 increases at least 20% after two distinct declines of 20%. The S&P 500 is viewed as a barometer of the overall market’s health because it is made up of the 500 largest companies by float-adjusted market cap.

Where Did the Term “Bull Market” Come From? 

In the stock market, bulls are speculators who believe that their investments will increase in value. Optimistic by nature, their can-do attitude can drive market prices higher, while their fierce determination allows them to face any short-term challenge head-on—just like their namesake.

In 1989, sculptor Arturo di Modica installed a bronze bull on Broadway at Bowling Green Park in Manhattan’s financial district. He created it as a symbol of defiance after the turbulent Stock Market Crash of 1987. The massive statue stands poised to charge, its horns thrust skyward, its stance widening, and its hooves leaving the ground—a harbinger for better days ahead.

What Is a Bear Market?

There’s a legend on Wall Street that characterizes markets by the actions of bulls and bears in battle: Bulls thrust upward, using their horns, while bears swipe downward with their paws.

A bear market is the inverse of a bull market. It is a period of decline in the S&P 500 of at least 20% for two months or longer. A bear market erases gains from a bull market and is characterized by negative investor sentiment, pessimism, and even fear. During this time, the economy slows, unemployment rises, productivity wanes, and businesses’ profits shrink.

But there would not be bull markets without bear markets; both are necessary parts of the business cycle, just as growth and contraction, or expansion and recession, define the broader economy.

It’s important to note that a bear market is not the same as a correction, which is a shorter-term pullback in stock prices, usually due to a news event, economic data, or earnings report that fell below expectations. A bear market, on the other hand, is a steeper, longer decline that typically lasts between 14 and 16 months.

Is a Bull Market Good or Bad?

Bull markets certainly feel better, but it all depends on what type of investor you are. Long-term buy-and-hold investors take comfort in bull markets knowing that their assets are growing, while put options traders, short-sellers, and inverse ETF investors all profit from bear markets.

Is a bull market ever bad? Skyrocketing growth does have its downside. Asset bubbles can form. This happens when stocks, industries, real estate, or other assets rapidly rise without underlying fundamental justification. The dot-com bubble, which grew in the late ‘90s and burst in 2000, is one such example. After a period of “irrational exuberance,” the tech sector witnessed a frenzied selloff, and the Nasdaq exchange, which was made up of technology companies, lost more than 75% of its value.

How Long Can a Bull Market Last?

As the saying goes, “what goes up must come down,” and while many buy-and-hold investors hope a bull market will last forever, true to the business cycle, the stock market will always experience periods of growth and decline.

However, it’s interesting to note that there have been just as many bull markets as bear markets since 1928, although bull markets tend to last much, much longer. In fact, the longest bull market in stock market history lasted more than 10 years, from March 2009 to March 2020. 

Chart of Bull Markets

Chart of Bear Markets

“Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria.” 

—Sir John Templeton

Bull Market Examples

Here are a few examples of bull markets from the early 20th century to the present.

Bull Market of the 1920s

In the aftermath of World War I, the stock market experienced the biggest bull market it has ever known. The 1920s were a time of hope and renewal for many investors, and (counting inflation), the market returned an incredible average of 20% gains per year. During this time, stockbrokers instituted the concept of investing with margin, which meant they paid a small percentage of the total value and borrowed the rest.

Bull Market in Bitcoin

The digital currency known as Bitcoin, which was valued at around 8 cents when it was launched in 2010, reached an all-time high of over $68,000 in November 2021. First used in a real transaction to buy a Papa John’s pizza, the cryptocurrency’s rapid growth has resulted in much speculation from nontraditional investors. Pundits routinely predict its demise based on tightening regulations and a strengthening U.S. dollar.

What Does It Mean When an Investor Is Bullish on a Particular Stock?

When an investor is “bullish” on a stock or a sector, that means they believe it will go up in value. If someone has a bullish view on the economy, that means they believe there will be positive economic developments, such as employment growth or rising GDP. 

Just remember, like the horns of a bull, those who identify as bullish believe the trend is up!