Bull Market
What Does Bull Market Mean?
A bull market is an economic scenario characterized by confidence and optimism about rising values in trade and a general positive outlook toward investment. It is typically defined by a 20% increase in the overall market value.
Insuranceopedia Explains Bull Market
The term “bull market” comes from the way the stock market’s upward movement resembles a bull thrusting its horns upward when attacking.
During a bull market, stock values rise, leading to a surge in investments and resulting in a positive economic environment that is often felt by the general population. However, economists note that this is just a phase in a larger market cycle and that eventually, the market will slow down, falter, and sometimes even experience a downturn or crash.
Bull markets also affect certain insurance products whose returns are tied to stock index performance. Indexed universal life insurance policies, for example, credit interest based on how a market index performs, so policyholders tend to see higher cash value growth during bull periods. Similarly, variable and indexed annuities may produce stronger returns when the broader market is rising, though they also carry more risk when it reverses.
