In the financial world, a bull season or bull market is used to describe a financial market in which prices are rising or expected to rise.
It is assumed that the origin of this term comes from the belief that bulls lift everything from below with their horns. The term “bull market” is often used to refer to the stock market; however, it can be applied to anything that is bought and sold, such as bonds, real estate, currencies and commodities.
Because the prices of securities are constantly rising and falling during trading, the term “bull market” is usually reserved for long periods in which the majority of security prices rise. Bull markets can last for months or even years.
Bull markets have optimism, investor confidence, and expectations that positive results should last for a long time. It is difficult to constantly predict when trends in the market may change. Part of the difficulty is that psychological influences and speculation can sometimes play a large role in markets.
There is no specific and universal metric used to describe a bull market. However, technically it is expected to have risen 20% from the relevant market low. Because bull markets are difficult to predict, analysts can usually only recognize this phenomenon after the event. A notable bull market in recent history is the period from 2003-2007. During this time, the S&P 500 increased significantly after the previous decline; When the 2008 financial crisis hit, after the bull market, there were big drops again.
Bull markets usually happen when the economy is strengthening or already strong. They tend to parallel strong gross domestic product and declines in unemployment and often coincide with increases in corporate profits. Investor confidence will also tend to climb during the bull market. The overall stock demand and the overall tone of the market will be positive. There will also be an overall increase in the amount of IPO activity during bull markets.
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