Core Insights - A bull market is characterized by a prolonged increase in stock prices, typically defined as a rise of at least 20% from recent lows, often accompanied by high investor sentiment and optimism [2][3][6] - Bull markets are generally associated with positive economic indicators such as strong corporate earnings, high consumer confidence, GDP growth, and low unemployment [4][7] - Historical examples illustrate that bull markets can last significantly longer than bear markets, with the average bull market since 1946 spanning over five years compared to an average bear market length of 16 months [7][8] Definition and Characteristics - A bull market is not strictly defined but is generally recognized when major stock indices like the S&P 500 or Dow Jones Industrial Average increase by at least 20% [2] - Investor sentiment is typically high during bull markets, leading to increased buying activity and higher stock prices [3] - Low interest rates during bull markets facilitate borrowing for businesses, contributing to expansion and increased initial public offerings (IPOs) [3] Economic Indicators - Bull markets often emerge from the recovery phase following a bear market, even when economic indicators like GDP growth and unemployment may initially be weak [5][9] - The S&P 500 experienced a notable bull market from March 2009 to February 2020, rising over 400% despite initial economic challenges post-2008 financial crisis [8][9] Comparison with Bear Markets - Bull markets are contrasted with bear markets, which are defined by a decline of 20% or more in major stock indices and are often linked to economic slowdowns and declining consumer confidence [6][7] - Since 1946, the S&P 500 has seen 11 bear markets, while bull markets have been significantly longer in duration [7] Investment Strategies - During a bull market, it is advisable for investors to assess their cash needs and consider reallocating assets to maintain liquidity [10][12] - Regularly reviewing and rebalancing asset allocation is crucial to avoid asset drift, which can occur as stock prices rise [12] - Dollar-cost averaging can be an effective strategy during bull markets, allowing investors to mitigate emotional decision-making by investing fixed amounts at regular intervals [13] - Focusing on long-term growth is essential, as the S&P 500 has historically averaged a 10% annual growth rate [14]