What Is Market Cycle?
The recurring pattern of expansion and contraction that markets move through over time.
The Full Definition
A market cycle is the recurring pattern markets move through: expansion (bull market), peak, contraction (bear market), and trough — before the cycle begins again. Cycles vary widely in length and severity and are driven by the underlying economic cycle, interest rates, and investor sentiment. Recognizing where you likely are in a cycle doesn't mean you can time it precisely, but it helps explain why valuations, sentiment, and sector leadership shift the way they do.
Real-World Example
The period from the 2009 market bottom to the 2020 pre-COVID peak was a single long expansion phase of the market cycle. The sharp COVID crash and rapid recovery that followed compressed an entire contraction-and-recovery cycle into just a few months — an unusually fast cycle by historical standards.