Bull markets are when an asset rises 20% from its previous lows and sustains an uptrend. It's a period of rising asset values. This unrelenting price advance is called a "bull."
Bull markets are supported by a number of factors. Wage growth, capital inflows, minimal unemployment, strong consumer spending and increasing corporate profits are all factors that lead to sustainable bull runs.
Stock markets witnessed their longest-ever bull run from 2009 to 2020, but this was a historic outlier. It’s important to discount this recency bias, as the average timeframe for a bull market is just 3.8 years.
The main benefit is a favorable appreciation in asset prices for investors. The average bull market returns are in the region of 112%, which poses an attractive opportunity to earn a return on money.
Bull markets are good for investing because the average return is 112%. Market timing is difficult. Near the end of a bull run, investors could lose a lot of money.
Typically, a bear market is defined as the point where an asset or stock market index such as the S&P 500 has declined by more than 20% from its highs.
On the other side of the coin is a bull market, where the same defined asset or index fund has gained 20% from its lows.
Current economic conditions are the best bull-bear indicator. Unemployment, consumer spending, debt, corporate earnings, and government stimulus are examples.