What is indicated by the term 'bull market'?

The term 'bull market' refers to a condition in which the prices of securities are rising or are expected to rise. This typically indicates a strong economy, investor confidence, and increasing spending, leading to a sustained increase in market prices. A bull market is characterized by a rise of 20% or more in broad stock indices, and it often lasts for a considerable amount of time, reflecting overall positive market sentiment.

Investor behavior and economic indicators align during a bull market, as optimism leads to more buying than selling. Such environments can promote further investment and expansion, reinforcing the upward price trend. Understanding this term is crucial for those in wealth management, as it influences investment strategies and risk assessment. The distinction is significant compared to other market conditions like a bear market, where prices are declining, or a stagnant market, which shows little movement in stock prices, indicating a lack of strong buyer or seller activity.