Market Overview

The Bull Market Turns 9 Years Old

The Bull Market Turns 9 Years Old

The current bull market turned nine years old Friday, and it seems appropriate to take a look back and see how far stocks have come since the S&P 500 hit a Financial Crisis low of 676.53 on March 9, 2009.

The S&P itself has more than tripled in value, up about 207 percent in those six years.

Some Perspective

The current bull market is closing in on history. Since the end of World War II, only one other bull market has endured longer and produced a greater overall return for investors. The current bull market, which has lasted for 108 months and produced an overall return of 301 percent for the S&P 500, has only been topped by the 1990s bull run, which lasted 113 months and delivered a 368 percent overall return.

Argus analysts said in a note this week that investors were feeling a bit better on the bull market’s eighth anniversary last year than they are today. This time last year, the S&P 500 was already up 6 percent year-to-date. This year, the index is fighting to hold onto a 1 percent year-to-date gain after giving up its huge January gains.

Rising inflation rates and interest rates are also ominous signs. Argus remains optimistic for now.

“We continue to believe that a positive global economy, growing earnings and more favorable valuations will give this bull legs for a few more years,” Argus analysts wrote.

A Few More Years

LPL Research analyst John Lynch is also optimistic that the bull can survive a few more years.

“We don’t believe bull markets die of old age; they die of excesses, and we aren’t seeing the same type of overspending, overborrowing, or overconfidence we’ve seen at other major market peaks,” Lynch said this week.

Lynch also pointed out that the S&P 500 was essentially flat during two calendar years of the nine-year rally (2011 and 2015) during which it experienced corrections of 19 percent and 14 percent, respectively.

Lessons To Be Learned

Mike Loewengart, vice president of investment strategy at E-Trade, says the nine-year journey should teach long-term investors some valuable lessons about patience and perspective.

“For investors who are concerned about the end of this bull market, the antidote may simply be adjusting portfolio allocations to risk levels they are comfortable with—whatever delivers peace of mind,” Loewengart says. “Because if history is our guide, the answer is not to sell and go home.”

Loewengart says younger investors with well-diversified portfolios especially have plenty of time to recover short-term losses and profit from the remarkably consistent long-term performance of the stock market.

While the longevity of the bull market remains up for debate, there’s no question that March 9, 2009 was an incredible buying opportunity for long-term investors. Since the market bottomed nine years ago, the SPDR S&P 500 ETF Trust (NYSE: SPY) has quadrupled in value.

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