How Much Longer Can This Bull Market Last?

It truly has been an unusual year in stock markets. When coronavirus rocked the world in February and March and indexes fell almost 30%, who would have thought that by the end of the year we would be seeing overall gains of 15%+?

This got us thinking about what to expect next year so we took a look at the last 190 days of the current bull market and compared it to the early stages of the last bull markets so we could see how we compare and give us an idea of what might come next.

We found the first 190 trading days of this bull market have been the strongest on record, just edging out the rallies coming off the March 2009 and August 1982 lows.

And that, of the 12 prior bull markets since WWII that lasted 200 trading days or more, the S&P 500 averaged a gain of 13.8% in the year after its first 200 trading days with gains all but once.

This is some exciting news for investors. Graphically, comparing this bull market to the last two strongest bull markets looks like this

Although it is hard to see, the current bull market is highlighted in red. The next best bull market was 1982 and lasted well over 1200 trading days. The 2009 bull market went on for over 2600 trading days.

So, even though it feels like stocks are expensive (they aren’t at all on a relative basis) we are likely still in the very early stages of a long-term secular bull and there will be many more gains to come.

With an average gain of almost 14% for the next 12 months of prior bulls, 2021 is shaping up to be another great year for US Stocks

Disclaimer: Capital 19 Pty Ltd ABN 17 124 264 366 AFSL 441891 (‘Capital 19’) believes the information contained is reliable, however, no warranty is given as to its accuracy and persons relying on this information do so at their own risk. This communication is for general information only and was prepared for multiple distributions and does not take account of the specific investment objectives of individual recipients and it may not be appropriate in all circumstances. Persons relying on this information should do so considering their specific investment objectives and financial situations. Any person considering action based on this communication must seek individual advice relevant to their circumstances and investment objectives. Subject to any liability which cannot be excluded under the relevant laws. Any opinions or forecasts reflect the judgment and assumptions of Capital 19 and its representatives based on information at the date of publication and may later change without notice. Any projections contained in this presentation are estimates only and may not be realised in the future. The investment manager certifies that all the views expressed in this document accurately reflect their views about the companies and securities referred to in this document and that their remuneration is not directly or indirectly related to the views. Capital 19, its directors, representatives, employees or related parties may have an interest in any of the companies and securities in this document and may earn revenue from the sale or purchase of any financial product referred to in this document or any advice. Past performance is not a reliable indicator of future performance. Unauthorised use, copying, distribution, replication, posting, transmitting, publication, display, or reproduction in whole or in part of the information contained in this document is prohibited without obtaining prior written permission from Capital 19.