What is a bull market?

We explain what a 'bull market' means

A bull market is generally defined by a 20 per cent rise in the stock market that takes place after a 20 per cent drop in the market.

This is not a precise definition and ‘bull market’ is often used to describe a situation in which investors are upbeat, putting a lot of money into stocks and think that the economy is going to perform well for the foreseeable future.

Though it’s usually used in the context of the stock market, ‘bull market’ can be used to describe almost any area of investment. You might have a ‘real estate bull market’ or a ‘bull market in the fine wine industry.’

The term ‘bullish’ is also derived from ‘bull market.’ To be ‘bullish’ about a particular stock, industry or market just means that you are confident that it’s going to perform well and increase in value.

More terms

Spot Rate

The currency exchange rate a bank quotes, valid with immediate effect.
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Stock Exchange

A physical/digital place where stockbrokers and traders can buy and sell securities.
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Clean price

The quoted price of a gilt, which excludes accrued interest
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W-8BEN Form

Non-US individuals and businesses may have to file this form for the Internal Revenue Service (IRS), the US tax authority.
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Nominal amount

The face value of a gilt. It represents the amount that will be repaid to the holder at maturity and is also used to calculate the dividend or coupon payment.
Read more

Coupon

Also called a dividend, this is the fixed annual interest paid to gilt holders. It’s usually paid in two equal, semi-annual instalments and expressed as a percentage of the nominal value of the gilt.
Read more

Yield to maturity

What is yield to maturity and why is it useful?
Read more

Compound interest

Understand what compound interest means and how it's calculated
Read more

Equity

The amount of money a company would be left with by subtracting its liabilities from the value of its assets.
Read more
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