Mar 3rd, 2008
Working Backwards: What’s a Bull Market?
A bull market is a market (typically the stock market) in which prices are increasing and/or are expected to increase. While the term is most frequently used in regards to the stock market, it can also be used in other markets, such as the bond market or real estate markets.
When a bull market is occurring, investors have overwhelming optimism and confidence. They expect that the markets will do well for an indefinite period, which has never proven true.
While a bull market runs its course, nearly all investors do well. Positive results are the norm, as the entire market tends to have gains. The rising tide of a bull market tends to float all boats; if an investor is not doing well in a bull market, it’s likely they are poorly diversified.
The term “bull market” refers to the way a bull attacks its prey. A bull thrusts its pray upwards with its horns; a bull market moves upwards to higher and higher gains.
