What is a bull market?
Last updated August 2026
Short answer
Good markets require no discipline, which is why the habits formed in them tend not to survive the next bad one.
The definition
A rise of 20% or more, measured on a broad index rather than a single holding.
Sustained over at least two months, which separates a durable advance from a sharp bounce.
Measured from a prior low, so the label is applied looking backwards and the start date is known only afterwards.
Why they matter more than bear markets
They have historically been longer and larger. The long-run upward path of equity markets is a bull market interrupted rather than the reverse.
Missing them is expensive in a way that avoiding declines does not compensate for, which is the arithmetic underneath advice to stay invested.
Most investing therefore happens during them, at prices that felt high and later did not.
The drift problem
Rising equities increase the equity share of a portfolio automatically. A 70/30 split becomes 80/20 without a single trade.
The change increases risk, and it does so precisely when risk feels least threatening.
The correction is rebalancing, and doing it on a schedule avoids turning it into a judgment about whether prices are high.
Try it in Walnut
Walnut reads your connected brokerage and shows what your allocation has actually become, which after a strong run is rarely what you set.
Confidence, and where it comes from
Extended gains make people feel skilled rather than lucky, and the two are indistinguishable while prices rise.
Risk tolerance measured during a bull market is unreliable, because nothing has tested it.
Leverage and concentration both look reasonable in this period and are the two things that turn a decline into a permanent loss.
What to do while it lasts
Keep contributing on schedule, since the alternative is waiting for a decline that may never arrive at the price you wanted.
Rebalance on a rule, which trims the winners without requiring you to predict anything.
Check concentration. A long advance is usually led by a narrow group, and a diversified-looking fund can end up dominated by it.
How they end, and why nobody rings a bell
The ending is dated retrospectively from the peak, which means the peak is identifiable only after the decline that defines it.
The proximate causes vary: a rate rise, an earnings disappointment, a shock nobody modelled. What they have in common is that the explanation is written afterwards and sounds obvious once it is.
Warnings are continuous throughout. Someone is always predicting the end, so the existence of a bearish argument carries almost no information about timing.
This is the argument for a rule rather than a view. An allocation with a rebalancing schedule keeps trimming into strength without requiring anybody to identify the top.
Sources
The definition is from the SEC glossary entry for Bull Market at investor.gov. Walnut is informational and is not an investment adviser. This guide is educational and not personalized investment advice.
FAQ
What is a bull market?
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The SEC describes it as a time when stock prices are rising and sentiment is optimistic, and states that generally a bull market occurs when there is a rise of 20% or more in a broad market index over at least a two-month period.
How long do bull markets last?
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Much longer than bear markets, historically, which is why long-term investing works at all. There is no fixed duration and no reliable signal that one is ending, and the ones that felt safest at the time were not.
Is it a bad time to invest during a bull market?
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Waiting for a decline that may not arrive has historically cost more than investing at an inconvenient price. Markets spend most of their time near highs, so a rule that avoids highs avoids most of the market's history.
What is the actual risk in a rising market?
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Drift. Your equity share grows automatically, so the portfolio becomes more aggressive without a decision. Most people discover their allocation has moved only when the next decline tells them.
Should I take profits?
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Rebalancing back to target does that mechanically, without a market call. Selling because prices feel high is a forecast, and in a taxable account it also realises gains you would otherwise have deferred.
How do I know when it ends?
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You do not, and the labels are applied retrospectively. The peak is identifiable only after the fall that follows it, which is why plans are built around allocation rather than around calling the turn.
Is there a warning before a bull market ends?
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No reliable one. The peak is dated retrospectively, and bearish predictions run continuously throughout, so their existence carries almost no timing information.
Should I hold cash waiting for a better entry?
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Historically that has cost more than it saved, because markets spend most of their time near highs. Cash held for a specific near-term expense is different from cash held as a market view.
Do bull markets die of old age?
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No. Length alone has not predicted the end of one, and expansions have run far longer than commentators expected more than once. What ends them is a change in conditions, not the passage of time, which is why duration is a poor basis for reducing risk.