What is a 'bull market'? Definition & meaning

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

Growth stocks

These are stocks in companies that are considered to be “growing”. These companies may be delivering new products and services, or entering new markets.

American Depository Receipts (ADRs)

Tradeable assets that let Americans invest in overseas stocks using US laws and dollars.

Wall Street

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

Internal Rate of Return (IRR)

A means of calculating the potential future return on an investment.

Free Trade

The other free trade. International trade in which countries allow goods to flow across their borders without imposing import or export taxes.

Balance sheet

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

Money laundering

A method of moving money obtained illicitly through the financial system so it can be used legally.

Time Value of Money

The concept that money you have now is more valuable than the same sum in the future.

Unicorn

A startup valued at over £1 billion. They are rare, hence the name.

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What is a bull market?