<p>A bull market is a period in which asset prices—most commonly stock indices—rise consistently and investor confidence is high.</p>

<h2>How It Works</h2>
<p>During a bull market, buying pressure outweighs selling pressure.</p>
<p>Several factors drive this upward trend:</p>
<ul>
<li>Strong economic growth, such as rising GDP and low unemployment.</li>
<li>Increasing corporate earnings that exceed expectations.</li>
<li>Accommodative monetary policy, including low interest rates or quantitative easing.</li>
<li>Positive investor sentiment, often reinforced by media coverage and market momentum.</li>
</ul>
<p>As prices climb, more investors are attracted, creating a self‑reinforcing loop of demand and higher valuations.</p>
<p>The trend continues until a shift in fundamentals or sentiment triggers a reversal.</p>

<h2>Why It Matters</h2>
<p>Recognizing a bull market helps investors align their strategies with prevailing conditions.</p>
<p>For example, during the bull market that followed the 2008 financial crisis, the S&amp;P 500 gained roughly 400% from its 2009 low to its 2020 peak.</p>
<p>Investors who maintained equity exposure benefited from compounded returns, while those who shifted to cash missed substantial growth.</p>
<p>Understanding the phase of the market also informs risk management: bull markets can tolerate higher volatility, but they may also precede overextension and subsequent corrections.</p>