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Bull Market

When the value of assets or securities is rising over a period of time, it means the market is currently in a bull market. Bull markets typically occur when the economy is thriving and when unemployment drops. 

While there are no clear metrics that define a bull market, a market is considered in a bull territory when the price surges at least 20% from its latest low, with indications that the upward trend will continue. This is the exact opposite of a bear market, which suggests a price drop of at least 20% from their most recent high. 

The terms bull and bear are mostly associated with the stock market, however, they can also apply to individual securities and other markets including currencies, bonds, and real estate. 

One of the key characteristics of a bull market is the growing investor confidence. Once the bull run starts and security prices rise, investors feel optimistic that the upward trend will continue so they buy more. As a result, increased buying activity further elevates stock prices due to the law of demand and supply. 

Additionally, companies are likely to invest more in growth and business development during the bull market, which is another common characteristic of this period.

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Author: Mircea Vasiu Updated: July 8, 2022