Bull Wikipedia

On February 12, 2020, the Dow Jones Industrial Average reached a record high of 29,551 points. The gains for the S&P alone amounted to over $18 trillion on paper, and during the period unemployment was at a 40-year low, at under 4%. But one common rule of thumb is a 20% stock price increase from the most recent low, with signs that prices will continue to grow. For example, you might invest $100 weekly, regardless of what the stock market is doing. By doing this, you’re buying more shares when the price is low and fewer shares when the price is high.

• Trying to time the market can actually negatively affect you—it’s difficult for even the experts to do.
• Bull markets often exist side-by-side a strong, robust, and growing economy.
• The longest stock market bull run lasted for 11 years—it started in March 2009 in the wake of the Great Recession and ended in March 2020 when the Covid-19 pandemic shut down the global economy.
• Bull markets can last for months or even years, and stocks tend to outperform other investments like bonds.
• Bear investors believe that the value of a specific security or industry is likely to decline in the future.

A bull market (aka a bull run) is a long, extended period in the market when overall stock prices are on the rise. A retracement is a brief period in which the general trend in a security’s price is reversed. Even during a bull market, it’s unlikely that stock prices will only ascend.

A bull market is a financial market characterized by rising prices and investor optimism. It is most commonly used to refer to the stock market, but can also refer to the bond, real estate, currency, and commodity markets. Bull markets tend to last for extended periods of time and are marked by increased demand for securities, rising corporate profits and GDP, and declining unemployment.

It is used by attaching a lead rope either directly to it or running through it from a head collar, or for more difficult bulls, a bull pole (or bull staff) may be used. This is a rigid pole about 1 m (3 ft) long with a clip at one end; this attaches to the ring and allows the bull both to be led and to be held away from his handler. Bulls are optimistic investors who are attempting to profit from the upward movement of stocks, with certain strategies suited to that theory. These examples are programmatically compiled from various online sources to illustrate current usage of the word ‘bullock.’ Any opinions expressed in the examples do not represent those of Merriam-Webster or its editors. Because it’s impossible to tell when a market has reached its top from a ground-level perspective, it’s very difficult to foresee the turning point before you are in it.

Another famous example of a bull market was the extreme run-up in U.S. housing prices in the mid-2000s. It was fueled by easy-money policies, relaxed lending standards, rampant speculation, unregulated derivatives, and irrational exuberance. If you are bullish on the S&P 500, you attempt to profit from a rise in the index by going long. Bears, however, are pessimistic and believe that a particular security, commodity, or entity is set to suffer a decline in price. By spreading investments across different asset classes, sectors, styles, and geographic regions, investors can still remain bullish without putting too many eggs in one basket. But experts are still mixed on what the rest of the year could look like.

How to invest in a bull market

One of the best examples of a bull market was the sharp rise in US technology stocks during the late 1990s. Between 1995 and its highest point in March 2000, the Nasdaq Index gained a whopping 400%. In these prime post-war years, the S&P 500 rose 267% over 86 months, which works out to a commendable annualized return of 20%. On the home front, consumer goods to fuel the Baby Boom were the main driver, while a strong export market also helped companies grow. The Federal Reserve raising interest rates and international tension brought this bull’s run to a stop, beginning a bear market phase.

Alternatively, the bull may be hobbled, or chained by his ring or by a collar to a solid object such as a ring fixed into the ground. Bull investors must be mindful of what is commonly known as bull traps. Bullish investors identify securities that are likely to increase in value and direct available funds toward those investments.

A male bovine — or cow — is a bull, and so is a male whale or elephant. Fittingly, the word bull is sometimes also used for a particularly bulky, muscular man. Another informal and slightly obscene meaning is “ridiculous,” or “not true,” as when you tell a lie and your brother rudely replies, “Bull!” This slang meaning has its roots in the Old French bole, “deception or trick.” An aggressive bull may be kept confined in a bull pen, a robustly constructed shelter and pen, often with an arrangement to allow the bull to be fed without entering the pen.

What Is a Bullish Reversal?

Generally, bulls kept with cows tend to be less aggressive than those kept alone. In herd situations, cows with young calves are often more dangerous to humans. In the off season, multiple bulls may be kept together in a “bachelor herd”. Bullish stocks are typically definition bull defined as stocks that display a bullish price pattern. In order to identify bullish stocks, there’s no substitute for learning the ins and outs of technical analysis. Always be on the lookout for early signs that a bull run may be coming to an end.

These include an increase in trading volume, as more investors are willing to buy and hold onto securities in the hopes of realizing capital gains. Securities in a bull market also tend to receive higher valuations, as investors are willing to pay more for them due to the perceived potential for price appreciation. There is no specific and universal metric used to identify a bull market.

The thinking behind this strategy is that, presuming that the bull market continues, the price of the security in question will quickly move back up, retroactively providing the investor with a discounted purchase price. Increased buy and hold is a variation of the straightforward buy and hold strategy, and it involves additional risk. The premise behind the increased buy and hold approach is that an investor will continue to add to their holdings in a particular security so long as it continues to increase in price. One common method for increasing holdings suggests that an investor will buy an additional fixed quantity of shares for every increase in the stock price of a pre-set amount.

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Companies that sell products directly to consumers (as opposed to industrials) have proven themselves over decades. Bull markets in recent years have tended to be powered by such companies, but more importantly, they may be a decent safe harbor during downturns as well. Consider investing in these equities, or in a large-cap mutual fund with such stalwarts. The best investment apps offer a range of investment options (including stocks, bonds, and cryptocurrencies) and market access. Some of the best investment apps for beginners also provide educational resources, research access, and human advisors for low fees.

Adam received his master’s in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem. These examples are programmatically compiled from various online sources to illustrate current usage of the word ‘bull.’ Any opinions expressed in the examples do not represent those of Merriam-Webster or its editors. Unfortunately, the Nasdaq crashed nearly 80% over the following several months, essentially giving back all of the gains made during the bull run. But just a month later, on March 11, the Dow lost over 20% of its value, falling to under 19,000.

These are just a few examples of some of the biggest bull markets in history. There have been many others, each with its own unique set of circumstances and drivers. Perhaps the most aggressive way of attempting to capitalize on a bull market is the process known as full swing trading. Investors utilizing this strategy will take very active roles, using short-selling and other techniques to attempt to squeeze out maximum gains as shifts occur within the context of a larger bull market. Aside from their reproductive duties, bulls are also used in certain sports, including bullfighting and bull-riding.

While there are many different ideas on how the term bull market came to be, it’s generally believed that it comes from how a bull attacks. A bull thrusts its horns https://trading-market.org/ upward when it attacks, so the term was adapted to describe stock market growth. During a bull market, there are several characteristics that can be observed.

A strong production economy, high employment, and rising GDP all suggest profits will continue to grow, and this is reflected in rising stock prices. Low interest rates and low corporate tax rates also are positive for corporate profitability. Bull markets are characterized by optimism, investor confidence, and expectations that strong results should continue for an extended period of time. It is difficult to predict consistently when the trends in the market might change. Part of the difficulty is that psychological effects and speculation may sometimes play a large role in the markets. Colloquially, people unfamiliar with cattle may also refer to steers and heifers as “cows”, and bovines of aggressive or long-horned breeds as “bulls” regardless of sex.

Better to enter and leave the market gradually, without drama — or according to your own preset benchmarks — rather than selling all at once because you’re convinced the market has reached its top. If you follow a buying strategy like dollar-cost averaging, stick to it. However, as spending and production increase, the prices of goods and services can inflate.

With dollar cost averaging, you invest a fixed amount of money into a security or securities at set intervals. In many areas, placing rings in bulls’ noses to help control them is traditional. The ring is usually made of copper, and is inserted through a small hole cut in the septum of the nose.

Since bull markets are difficult to predict, analysts can typically only recognize this phenomenon after it has happened. A notable bull market in recent history was the period between 2003 and 2007. During this time, the S&P 500 increased by a significant margin after a previous decline; as the 2008 financial crisis took effect, major declines occurred again after the bull market run. Investors who want to benefit from a bull market should buy early in order to take advantage of rising prices and sell them when they’ve reached their peak.

It can be tempting to go all-in on a hot stock or sector when the market has been growing, but the end may be closer than you think. If you’ve only bought the biggest so-called winners, you may find that their pumped-up prices evaporate the quickest. A super-strong bull market can make even weak companies appear like sure things — until they aren’t. Be sure you know what it means to diversify effectively, and keep in mind that knee-jerk reactions to news about individual stocks or companies aren’t the best way to figure out where to invest. This record-breaking bull market lasted 131.4 months (nearly 11 years), making it the longest in history. After taking a beating during the Great Recession (2007 to 2009), the S&P 500 gained over 400% after a low of 666 points on March 6, 2009.

The longest stock market bull run lasted for 11 years—it started in March 2009 in the wake of the Great Recession and ended in March 2020 when the Covid-19 pandemic shut down the global economy. The longest bull market in the history of the S&P 500 index lasted from March 2009 to February 2020 and saw the index gain over 300%. This bull market was characterized by strong earnings growth, low interest rates, and investor optimism. Despite its length, the bull market was relatively volatile, with several corrections and pullbacks along the way. The technology sector significantly outperformed the broader market during this bull market. In larger pastures, particularly where a bull is kept with other cattle, the animals may simply be fed from a pickup truck or tractor, the vehicle itself providing some protection for the humans involved.