SmartRateToolsDefinition
A bull market is the opposite of a bear market. Prices rise steadily, investors feel confident, and economic conditions look favorable. Bull markets can last years or even decades. The challenge during bull markets is not getting too greedy or overconfident and forgetting that downturns always come eventually. The euphoria can make risky bets feel safe.
Why it matters
Bull markets build wealth if you're invested. Someone who stayed fully invested during the 2010s bull market saw their S&P 500 holdings nearly triple. The flip side is that easy gains can tempt you to take excessive risks or believe you've become a stock-picking genius. Many people borrow to invest or chase speculative stocks near the end of bull markets, right before crashes. Remember that bull markets don't last forever.
Quick example
From March 2009 to January 2020, the S&P 500 rose from 676 to 3,386 (five times higher). People who invested steadily or stuck with existing investments made tremendous gains. Those same gains ended up being temporary if they panicked and sold in March 2020, missing the recovery.
The bottom line
Knowing what Bull Market means helps you make better day-to-day money decisions. It makes rates, account options, and tradeoffs easier to compare.