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Bull market

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.

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More terms

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Retail Prices Index (RPI)

An index published each month by the Office for National Statistics, which measures the level of retail prices in the UK. Cash flows on all index-linked gilts are linked to the RPI.

Limit order

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Wall Street

A street in New York that became a figure of speech for the financial markets of the US.

Interest Rate

The amount a lender charges for lending your money, or a borrower pays you for borrowing your money.

Net asset value

Mutual funds and investment trusts are priced on their net asset value (NAV).

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.

Exchange-Traded Fund (ETF)

A collection of investments, pooled into a single fund that can be bought and sold on a stock exchange.

Balance sheet

A summary of a company's finances, including its assets, liabilities and shareholder equity.

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