Bull Market
Marché haussier in French
Quick definition
A bull market is a sustained rise in stock prices, conventionally a gain of 20% or more from a recent low. Bull markets tend to run for years, climb gradually, and deliver most of the long-term returns investors count on.
What counts as a bull market
The 20% threshold is a convention, not a law of nature. When a broad index climbs 20% or more above a recent low, commentators declare a bull market, and the label sticks until a bear market, a 20% drop from the new peak, ends it.
The two animals behave differently. Bear markets tend to be sharp and fast; bull markets are usually long and gradual, grinding higher over years with plenty of stumbles along the way. Markets have historically spent far more time rising than falling.
Climbing a wall of worry
A curious feature of bull markets is that almost nobody trusts them. Most are doubted the whole way up: first the rally is dismissed as a bounce, later it is called overextended, and at every new high someone declares the top is in. The market climbs anyway, which is where the phrase climbing a wall of worry comes from. Investors who wait for the worry to clear often wait through years of gains, because it never fully clears.
The dangers of good times
The biggest threats to a portfolio in a bull market come from the investor, not the market:
- Overconfidence. After years of gains, risk feels safe and caution feels costly. It is easy to confuse a bull market with skill: when everything is going up, every strategy looks brilliant.
- Performance chasing. Money pours into whatever has risen the most, usually right after the biggest gains have already been made.
- Allocation drift. As stocks balloon, they quietly take over the portfolio: a mix chosen at 60% stocks can drift to 75% or more, leaving you carrying more risk than your risk tolerance ever agreed to. Periodic rebalancing back to your asset allocation targets is the antidote.
Staying invested beats timing
The temptation in a mature bull market is to step aside and wait for the drop. The catch is that the market's best days tend to cluster around its worst days, so investors who jump out usually miss part of the rebound too, and missing even a handful of the best days takes a large bite out of a lifetime result. The winning move is dull: hold an allocation you can live with in both directions, and let the bull run.
In Canada
Canadian investors often live through two bull markets that refuse to move in step: the resource-heavy Canadian market and the technology-heavy US market can take turns leading by wide margins for years. A globally diversified portfolio smooths that out, one more reason to judge results against your own plan rather than whichever market is winning.
Worked example
Priya starts a bull market with a 60% stock, 40% bond portfolio matched to her risk tolerance. Years of gains later, stocks have drifted to 78% of the portfolio, and nothing feels wrong because everything keeps rising. She rebalances back to 60/40, selling some winners to buy bonds. When the downturn eventually arrives, her portfolio falls far less than it would have at 78% stocks, and she stays invested for the recovery.
Related terms
Reviewed by Alexandre Bernier, CFP®, CIM®, PFP®·Updated August 2026