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A market where prices have been rising over time – and haven’t fallen by more than 20% from their most recent peak.
A bull market is a market in which prices have been rising over time – and haven’t fallen by more than 20% from their peak. It’s most often used in reference to the stock market, but it can also be applied to other financial markets. When a market is rising, it’s sometimes referred to as ‘bullish’.
Bull markets tend to last for months or even years. The longest bull market in US stock market history lasted for 11 years, from 2009 until the Covid-19 crash in 2020. It’s difficult to assess how long a bull market might last, because there’s no reliable guide to the future health of the stock market.
And, it’s important to remember that even in a bull market, a market crash is possible at any time – so it’s important to take steps to manage your risk when investing by diversifying your investments.
The difference between a bull and bear market is in the current market condition. While a bull market is a sign of a rising market, a bear market indicates a falling market and is sometimes a sign of higher volatility – which can increase your risk.
The way to remember the difference is in the way the animals attack: a bull swipes up with its horns, while a bear swipes down with its claws.
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All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest.