What does the term "bull market" describe?

The term "bull market" describes a financial environment where prices are rising or are expected to rise. This situation often reflects broad economic growth, increased investor confidence, and expectations of strong future performance. In a bull market, the demand for securities typically outpaces supply, leading to rising prices. Characteristics of a bull market can include sustained increases in asset prices over time and favorable market conditions that encourage investor participation.

This concept is critical for investors as it guides decision-making regarding buying and holding investments, as the prevailing upward trend generally supports the strategy of purchasing stocks with the anticipation that their prices will continue to climb. Understanding this term helps investors capitalize on opportunities presented during favorable market conditions.