A bull market is a period of several months or years during which asset prices consistently rise. It is the opposite of a bear market , in which securities prices consistently fall.

Of course, different market sectors may experience bull markets at different times. The causes and characteristics of bull markets vary, but most financial theorists agree that both economic cycles and investor sentiment both play a role in the creation and momentum of bull markets.

In general, a strong or strengthening economy , indicated by high employment, high disposable income and high business profits usually ushers in a bull market.

Rising investor confidence also indicates a bull market and is perhaps more powerful than any economic indicator.

When investors believe something is going to happen a bull market, for example , their actions can turn it into a self-fulfilling prophecy. In the first phase, prices are low, investor sentiment is low, and investors are pessimistic about future prices. In the second phase, stock prices, trading activity and corporate earnings begin to increase and economic indicators are above average.

Bull Market Definition & Example | Investing Answers

Investor sentiment also gets more optimistic. In the third phase, market indexes and many securities reach new trading highs.

Trading activity continues to increase, and dividend yields reach historic lows. In the fourth and final phase, there is excessive IPO activity, trading activity and speculation. As investors take profits or react to bad news or negative indicators, bull markets generally unravel.

Bull markets usually present a multitude of moneymaking opportunities for investors because prices generally rise across the board. But bull markets don't last forever and they don't always give advance notice of their arrival, so the investor must know when to buy and when to sell to maximize his or her profits.

This means the investor must attempt to time the market , or gauge when a bull market has begun and when it is ending.

Analysts spend thousands of hours trying to determine what will trigger the next bull market and how long it will last. Technical analysis is especially prevalent in this effort, although less sophisticated indicators such as hemline fashions or the NFL division of the last Super Bowl winner also provide fodder for such predictions.

For details on the history of the words that describe market trends, read The Quirky And Brutal Origins Of The Terms 'Bear' And 'Bull. Our in-depth tools give millions of people across the globe highly detailed and thoroughly explained answers to their most important financial questions. Each month, more than 1 million visitors in countries across the globe turn to InvestingAnswers. Financial Dictionary Calculators Articles.

How it works Example: Identifying and measuring bull markets is both art and science. Regardless of their exact beginnings and ends, bull markets typically have four phases. Most Popular Calculators Amortization Schedule Calculator: What Is the Repayment Schedule for My Mortgage? Compound Annual Growth Rate CAGR Calculator. How Much Could I Save Up Over Time?

US stocks enter last and most aggressive phase of bull market - Business Insider

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