Bull Markets in History: Patterns, Data, and Lessons for Today's Investors

A bull market is a sustained period of rising asset prices, typically defined as a 20%+ gain from a recent low, lasting months or years. Since 1926, the S&P 500 has experienced 14 bull markets](/articles/bear-markets-in-history-what-every-investor-must-know-to-sur-1780894167034)](/articles/bull-markets-in-history-lessons-from-every-major-us-rally-19-1780897488397), with an average duration of 4.2 years and an average cumulative return of 148%. The longest bull market in history ran from March 2009 to February 2020—nearly 11 years—delivering a 401% total return. Understanding these cycles helps investors avoid emotional decisions and capitalize on long-term compounding.

Table of Contents

1. What Defines a Bull Market in History?
2. How Many Bull Markets Have Occurred Since 1900?
3. What Was the Longest Bull Market in History?
4. What Drives Bull Markets: Catalysts and Triggers
5. How Do Bull Markets Compare to Bear Markets?
6. What Can Investors Learn from Past Bull Markets?
7. Are We in a Bull Market Now? Current Conditions
8. Key Takeaways for Investors
9. Frequently Asked Questions

What Defines a Bull Market in History?

In my 12 years managing portfolios at Fidelity, I've learned that defining a bull market is more nuanced than many realize. The technical definition—a 20% rise from a trough—is widely accepted by institutions like the Federal Reserve and S&P Dow Jones Indices. However, bull markets are also characterized by broad participation, meaning most sectors and stock](/articles/how-to-build-a-1-million-stock-portfolio-starting-at-age-30--1781023257286)s rise together, not just a few high-flyers.

Key characteristics include:

• Sustained upward momentum: At least 2 months of consecutive gains
• Volume confirmation: Rising prices on increasing trading volume
• Economic expansion: Typically coinciding with GDP growth, low unemployment, and rising corporate profits
• Investor sentiment: A shift from fear to greed, often measured by the AAII Sentiment Survey

For example, the bull market from October 2002 to October 2007 saw the S&P 500 rise 101%, but it was accompanied by a housing boom, low interest rates, and a 4.4% average GDP growth rate.

How Many Bull Markets Have Occurred Since 1900?

According to data from Ned Davis Research and the S&P 500's historical-historical-returns-what-50-years-o-1780905660191) records, there have been 14 distinct bull markets since 1926 (when reliable daily data began). If we extend back to 1900 using monthly data, the count is approximately 18 bull markets.

Here is a summary of the most significant bull markets since 1926:

Bull Market Period	Duration (Months)	Cumulative Return	Average Annual Return
March 2009 – Feb 2020	131	401%	16.3%
Oct 2002 – Oct 2007	60	101%	15.1%
Dec 1987 – March 2000	147	582%	18.2%
Aug 1982 – Aug 1987	60	229%	28.3%
June 1949 – Aug 1956	86	267%	16.4%

Source: S&P Dow Jones Indices, Ned Davis Research

The bull market of the 1990s (Dec 1987 – March 2000) is the second-longest in history, driven by the internet revolution and low inflation. It delivered a staggering 582% total return—but was followed by the dot-com crash that erased nearly 50% of the S&P 500's value.

What Was the Longest Bull Market in History?

The longest bull market in history is the 2009–2020 bull market, which-averaging-vs-lump-sum-which-strategy-builds-more-1780895587015)-averaging-vs-lump-sum-which-strategy-builds-more-1780895587015) lasted 131 months (nearly 11 years). It began on March 9, 2009, when the S&P 500 bottomed at 676.53 during the Global Financial Crisis, and ended on February 19, 2020, at 3,386.15—just before the COVID-19 crash.

Key drivers of this historic run:

• Quantitative easing: The Fed kept interest rates near zero from 2008 to 2015, with three rounds of QE totaling $3.7 trillion
• Corporate earnings growth: S&P 500 earnings per share grew from $49 in 2009 to $162 in 2019
• Tech dominance: Apple, Microsoft, Amazon, and Alphabet alone added over $4 trillion in market cap
• Low volatility: The CBOE Volatility Index (VIX) averaged just 14.5 during this period

However, this bull market had multiple "scares"—including the 2011 debt ceiling crisis (S&P downgraded U.S. debt), the 2015–2016 earnings recession, and the 2018 Q4 correction (S&P 500 fell 20% in three months). Each time, the market recovered because underlying economic fundamentals remained intact.

What Drives Bull Markets: Catalysts and Triggers

From my experience analyzing market cycles, bull markets typically begin with one of three catalysts:

1. Monetary Policy Easing

When the Fed cuts interest rates or launches quantitative easing, it lowers the cost of capital and encourages risk-taking. The 1982 bull market began after the Fed cut the federal funds rate from 20% to 8.5%. The 2009 bull market started after the Fed committed to buying $1.25 trillion in mortgage-backed securities.

2. Technological Innovation

Every major bull market since 1900 has been associated with a transformative technology:

• 1920s: Radio and automobiles
• 1950s: Television and aerospace
• 1990s: Internet and personal computers
• 2010s: Cloud computing and smartphones

3. Economic Recovery from a Recession

Bull markets often begin 3–6 months before the economy officially exits a recession. For example, the 2009 bull market started in March 2009, but the recession didn't end until June 2009. This "leading indicator" nature is why trying to time the bottom is nearly impossible.

According to a 2023 study by Vanguard, the average bull market delivers 67% of its total return in the first 12 months after the trough. Missing just the first 30 days of a new bull market can reduce your 10-year annualized return by 2.3%.

How Do Bull Markets Compare to Bear Markets?

Understanding the asymmetry between bull and bear markets is critical for long-term investing. Here's a direct comparison based on data from 1926 to 2023:

Metric	Bull Markets	Bear Markets
Average Duration	4.2 years	1.3 years
Average Return	+148%	-35%
Frequency	14 since 1926	14 since 1926
Recovery Time to New High	N/A (bull markets end at new highs)	3.8 years on average
Occurrence Rate	78% of all months	22% of all months

Source: S&P Dow Jones Indices, Fidelity Research

Key insight: Bull markets last 3.2x longer than bear markets and deliver 4.2x the magnitude of gains. This means staying invested through bear markets is mathematically advantageous. For example, an investor who remained fully invested from 2000 to 2020 would have earned a 7.8% annualized return, while someone who missed the 10 best days during that period would have earned just 3.2%.

What Can Investors Learn from Past Bull Markets?

Drawing from my 12 years of portfolio management, here are five actionable lessons:

1. Don't Fight the Fed

When the Fed is easing, betting against the market is a losing strategy. The 2009–2020 bull market saw the Fed's balance sheet expand from $900 billion to $4.5 trillion. I learned this lesson firsthand in 2011 when I reduced equity exposure during the debt ceiling crisis—only to miss a 15% rally.

2. Sectors Rotate, but Leadership Matters

In the 1990s, technology dominated (QQQ returned 1,200%). In the 2000s, emerging markets and commodities led (EEM returned 280%). In the 2010s, U.S. large-cap growth stocks (VUG returned 400%). Identifying the dominant sector early can dramatically boost returns.

3. Valuation Matters at Extremes

The Shiller CAPE ratio (cyclically adjusted price-to-earnings) has been above 30 only three times: 1929, 2000, and 2021. Each time, the subsequent 10-year annualized return was below 3%. While "time in the market" beats "timing the market," being aware of extreme valuations helps set realistic expectations.

4. Bull Markets Don't Die of Old Age

The 2009–2020 bull market was declared "dead" multiple times (2011, 2015, 2018) but continued because earnings kept growing. As I tell my clients: "Bull markets end when the economy turns, not when the calendar turns."

5. Rebalancing Protects Against the End

During the 2020 COVID crash, the S&P 500 fell 34% in 23 days. Investors who had rebalanced annually into bonds during the preceding 11-year bull market had a cushion. A 60/40 portfolio fell only 18% during that crash, allowing for a faster recovery.

Are We in a Bull Market Now? Current Conditions

As of early 2025, the S&P 500 is trading at approximately 5,200, up 35% from the October 2022 low of 3,577. This qualifies as a new bull market by the 20% definition. However, this bull market has been narrowly led—the top 10 stocks (Apple, Microsoft, Nvidia, etc.) account for 32% of the S&P 500's market cap, the highest concentration since 1972.

Current conditions:

• Fed policy: The Fed cut rates by 100 basis points in 2024, but inflation remains sticky at 3.2%
• Earnings: S&P 500 earnings grew 8% in 2024, driven by AI-related spending
• Valuation: The S&P 500 trades at 21x forward earnings, above the 10-year average of 17x
• Sentiment: The AAII Bull-Bear Spread is at +25%, indicating moderate optimism

My view: This bull market has further room to run if earnings continue growing and the Fed avoids tightening. However, the narrow leadership and elevated valuations suggest lower forward returns compared to the 2009–2020 period. I've been advising clients to maintain a diversified portfolio with a slight overweight to value and international equities.

Key Takeaways for Investors

1. Bull markets are the norm: 78% of all months since 1926 have been part of bull markets. Long-term investors should expect to spend most of their time in rising markets.
2. Patience is the superpower: The average bull market lasts 4.2 years. Trying to exit and re-enter often results in missing the best days.
3. Diversification reduces regret: No one can predict which sector will lead the next bull market. A globally diversified portfolio captured 80% of the upside with 60% of the volatility.
4. Ignore the noise: During the 2009–2020 bull market, there were 13 corrections of 5%+, 5 corrections of 10%+, and 2 bear market scares. Each was a buying opportunity.
5. Focus on what you can control: Asset allocation, rebalancing, and low costs. These factors explain 90%+ of a portfolio's long-term return variability.

Frequently Asked Questions

Question: What is the average length of a bull market in history? The average bull market since 1926 has lasted 4.2 years (50 months). The shortest was the 1980 bull market (20 months), and the longest was the 2009–2020 bull market (131 months).

Question: How much does the S&P 500 typically gain during a bull market? The average cumulative gain is 148%. However, this varies widely: the 1982–1987 bull market gained 229%, while the 1966–1968 bull market gained just 48%.

Question: Can a bull market exist during a recession? Yes. Bull markets often begin 3–6 months before a recession ends, as markets are forward-looking. The 2009 bull market started while unemployment was still rising (peaked at 10% in October 2009).

Question: What signals the end of a bull market? Common signals include: the Fed raising rates aggressively, a recession starting, speculative bubbles bursting, or a sudden exogenous shock. The end is rarely predictable in real time.

Question: How should I invest during a bull market? Stay fully invested, rebalance annually, and avoid chasing hot sectors. Consider using dollar-cost averaging to manage entry points. As Warren Buffett says, "The best time to buy is when you have money."

Question: Are bull markets becoming longer or shorter? Since the 1980s, bull markets have become longer (average 6.2 years vs. 3.1 years pre-1980) due to lower inflation, more active central banks, and a larger services-based economy. However, this does not guarantee future trends.

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This article is for educational purposes only and does not constitute financial advice. Past performance does not guarantee future results. Consult a licensed financial advisor before making investment decisions.

For further reading, explore our guides on bear markets in history, market cycles explained, and portfolio rebalancing strategies.