A bull market is a period in which the prices in a market rise overall. Any asset class, including stocks, bonds, or commodities, can experience a bull market. Historically, bull markets tend to last longer than bear markets.
Bull markets in stocks often coincide with periods of robust economic growth. Increased earnings often lead to higher stock prices, and a general optimism can attract more people to the stock market, increasing share prices further. At the extreme, bull markets can create bubbles in which prices rise far past the value of the underlying asset.
While bull markets are appealing, shares and companies generally get more expensive during bullish times. Unless the rise in price is driven by rapidly growing profits or the realistic prospect of some disruptive innovation that promises large profits in the future, companies are less likely to be undervalued, and thus less likely to provide high returns over the long term.
David Gardner Explains
Related Fool Articles
Related Community Blogs
Recent Mentions on Fool.com
- Bond Investors: Here?s How to Profit From Rising Interest Rates
- 1 Key Lesson Apple, Inc. Can Learn From the Luxury Auto Business About How to Keep People Buying
- Why Samsung Will Not Acquire Advanced Micro Devices, Inc.
- This Burger Stock Is Overrated (Hint: It's Not Shake Shack)
- As Apple Prepares To Disrupt The Cable Industry, Don't Expect An Apple TV Set Any Time Soon
- 3 Market Lessons From the 1st Quarter of 2015