Financial Planning Fridays #164: How Long Can Stocks Continue to Go Up?
This Financial Planning Friday reviews the 27 bull markets in the S&P 500 since 1928, focusing on the 12 that lasted more than two years. Jerry Davidse compares their average length and return to the current three-year bull market and explains why that history supports staying disciplined rather than trying to predict when it will end.
This Financial Planning Friday reviews the 27 bull markets in the S&P 500 since 1928, focusing on the 12 that lasted more than two years. Jerry Davidse compares their average length and return to the current three-year bull market and explains why that history supports staying disciplined rather than trying to predict when it will end.
Key takeaways
- Since 1928, the S&P 500 has had 27 bull markets, and 12 of them lasted longer than two years.
- Those longer bull markets have historically averaged a 195% total return and lasted about 1,450 trading days.
- No one can know in advance how long the current bull market will continue.
- Past performance does not guarantee future results, but history has tended to reward investors who stay disciplined through a bull market's full length.
Hi friends. How long can stocks continue to go up? Well, this current bull market has now lasted for just over three years. So let's look together at what previous multi-year bull markets have looked like. We have had 27 bull markets since 1928, and of those, 12 have lasted longer than two years. A bull market is when stocks rise more than 20% from a previous low.
These bull markets had a total average return of 195% and a total median return of 125%. You can see in this chart that we would need an additional gain of 28% to reach the median and 98% to reach the average. They have also lasted an average of 1,450 trading days, with the shortest one ending on day 516 and the longest lasting more than 3,000 days.
We have about another two years before this current bull market reaches the median and average length. If we broke the record for the longest bull market shown on the right, we would have another nine years to go, ending sometime in 2034, when our nine-year-old daughter Emma graduates from high school.
So what does all this mean? We still have no way of knowing how long our current bull market is going to continue. No one does. However, once again, history tells us that we may have a lot more gains ahead of us. When we look at this data, it makes us feel optimistic and even further committed to the disciplined and defined investment strategy that we use with our clients.
No matter what happens next, we feel well prepared at Presilium and are ready to take advantage of whatever the market and the world bring us for our clients. Thank you, and I look forward to talking with you next Friday morning.
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