Updated: May 2, 2019
Due to the fact that there is a reasonably high level of contempt for this current bull market, mostly due to the sluggish employment sector and the radical actions of the Federal Reserve, there is something interesting that has gone largely unnoticed. For the S&P 500, it’s actually been one of the longest bull market runs in history. Here is the latest chart showing where we are in relation to previous bull markets.
A “bull market” in the S&P 500 is defined as a period without a greater than 20% decline in price.
As you can see, this current run without a 20% stock price decline has lasted 98 months and counting. This is quite a feat considering the numerous tremors the market has seen. From the Flash Crash to the European sovereign debt crisis to the oil price crash to the most recent and long overdue interest rate increase by the Federal Reserve. Needless to say there’s been many opportunities for the market to take a 20% decline, but it’s just kept it’s head down and continued upwards.
From the lows in March 2009 of 666.79$ to an intraday high of 2400.98$. It’s been quite a run. When will it end?
My best guess is, and it really is just a guess because the Fed has done a tremendously bad job communicating it’s policy to the public, my best guess is that this bull market run will continue for a few years longer at least. Gun to my head if I had to pick a time, I’d say mid to late 2018’ish. I think the Fed will be sporadic in raising interest rates (although I’d very much like them to start normalizing) and market participants will likely take this news well.
I don’t think this run will break the all time record, but the market has a lot of momentum and it wouldn’t surprise me to see it move comfortably into the #2 spot and very close to #1 before the party ends.
It’s worth noting though if you look at the column for “subsequent decline” it’s pretty clear the market has a tendency to give quite a bit of it’s gains back when the bull market run finally does break. So while it’s certainly possible this run still has some legs, it would not be overly surprising to see a significant crash when it’s all said and done.
The longest bull run ever, 1990 – 2000 ended in the dotcom crash
The second longest ever ended with the crash of 1929 and the great depression
The bull run in the 80’s ended with the famous crash of 87′
2002 – 2007 ended with one of the biggest financial crisis in history
Only 1 of the largest 6 resolved itself in a reasonably manageable fashion
How is this one going to end? Nobody knows, but now would be a great time for people to shift their portfolio’s into investments that aren’t so highly correlated with the S&P 500 like our Total Portfolio Solution.
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