A Bull Market Makes Rising Prices Feel Like the Natural Order
Green again. Third straight week of it, and the portfolio app has quietly stopped being scary to open — that's a bull market working on you from the inside.
A bull market is a sustained stretch of broadly rising prices and growing optimism. The common yardstick is a 20% rise from a recent major low — a convention, not an official rule.
How the label gets applied
If a broad index climbs from 3,000 to 3,600, that's the 20% marker, and the headlines start saying bull market. The starting low is only obvious in hindsight, so the name usually arrives well after the turn.
Nobody rings a bell at either end. A 15% rally can still roll over, and a genuine bull run can be months old before anyone agrees on what to call it.
Why rising prices feed themselves
Gains pull money in, inflows push prices higher, and higher prices make the next buyer more confident. Falling volatility adds to the effect — the market simply feels safer.
Earnings growth, low rates, and easy credit often supply real fuel underneath. Mood and fundamentals reinforce each other until, sometimes, the mood runs ahead.
The risks that grow with the gains
Comfort is the quiet hazard. After years of gains, investors size positions bigger, treat recent returns as normal, and read every dip as a buying chance because every previous dip was one.
Rising prices also stretch valuation: when prices climb faster than earnings, some of tomorrow's return has already been spent. A bull market can stay narrow, too, lifting the index while plenty of stocks sit out.
Corrections — drops of around 10% — happen inside healthy bull markets without ending them. A 20% fall in the other direction marks the handoff to a bear market.
What to do with the label
The label describes where prices have been, not where they're going. The useful response is boring: keep your allocation, your position sizes, and your reasons written down while confidence is loud.
The SEC's investing glossary pins down this term and its neighbors.
Review your risk the same week your account hits a new high — that's exactly when it's easiest to skip.