I am asked this question several times a week. Since I adjust to the market and do not predict it, let me give you a possible scenario. Volatility has returned, the S&P 500 has fallen more than 4% and the doomsayers and short sellers are expounding that the bubble has burst.
Now that we are back to within 1% of its all-time high their calls have been somewhat muted. I have no intention of trying to market time but I believe this market has a long way to run before the bulls stop making money.
There is no doubt that this bull market is getting mature and I don’t see a retirement plan for the bull forthcoming. The bull is now some 63 months old. That is longer than nine of the 15 bull markets since 1871.
However, it still has five more months to go until it is average in terms of length-and 41 months before it reaches the post-World War II average. Bull markets have been getting longer since the end of the War-a lot longer. Starting with the beginning in1949, bull markets have lasted an average of 104 months or nearly 9 years. The current 5 years doesn’t seem so old, does it? There has been seven bull markets (including this one) since 1949 and the current one only places seventh in terms of length.
From the low in 2009 at 66.79, to the all-time high of 1897.28, the S&P has risen 185%. That is above the 163% average since 1871. However, the modern bull (since the end of WWII) has averaged 259% gains.
Three bull markets gained less than 100% while the other three were up 391%,414% and 516%, respectfully. Could the fact that the current one broke through the 100% barrier mean that it’s headed significantly higher?
This is just an observation but if the market simply performed according to ache average modern day bull market, it would last another 3 ½ years and rise 74%.