Historical Context to the current Bull Market

March 9th marked the 2^nd birthday of our current bull market since the S&P 500 bottomed on 3/9/09¹.  This bull market has been vigorous compared to past bull markets which leaves many to question how long it can continue. 

 What next? 

Viewing bounce backs after major bear markets² yields interesting conclusions to the potential longevity of this bull market. 

8 of the last 12 bull markets that celebrated a 2^nd birthday went on to notch gains for the 3^rd year, with an average return of 9%.  On a “roundtrip basis”, which includes the bear and the next 2 and 3 years, we can see that the roundtrip performance of our recent market is actually below averages, due to the severity of the ’07-’09 drop. 

What to do?  

Pundits have been predicting this market will drop solely because it’s gone up for 2 years.  We don’t know if the market will rise for a 3^rd year, but this analysis shows us that it is not a foregone conclusion. 

(1)    As measured by S&P 500 Closing Price.  All graphical data based on S&P 500.

(2)    Defined as a 20% drop in the S&P 500 over a 6 month period

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