The Current Bull Market Could Run Longer Than You Think

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Sheaff Brock Investment Advisors, LLC

Aug 29, 2024, 13:00 ET

Sheaff Brock's 2024 Performance Mid-Year Update

INDIANAPOLIS, Aug. 29, 2024 /PRNewswire/ -- Reviewing the historical duration of bull markets in Sheaff Brock's mid-year report to clients, Managing Director & Chief Investment Officer Dave Gilreath and Managing Director Ron Brock suggest that the current bull market is still relatively young.

Showing the lengths in months of bull and bear markets since 1942, the green “bull market” bars are much longer than the red “bear market” bars.

Today's stock market is in a bull market that started in October of 2022 after a 9-month, 25% drop in the S&P 500 bear market. Comparing bull and bear markets over the last 75 years, Ryan Detrick at Carson Research indicates that the average bull market has lasted 61 months, or just slightly more than 5 years. At 22 months into the current bull market, this one is well under half as long as the average.

Showing the lengths in months of bull and bear markets since 1942, the accompanying chart clearly shows the green "bull market" bars are much longer than the red "bear market" bars. Bull markets often last a long time; some run for years. In contrast, bear markets are usually over within a few weeks or months, yet the fear of bear markets can make them seem worse.

Equity markets go up in the long-term when corporate earnings increase, which occurs when the economy, as measured by the gross domestic product (GDP), is good and growing. According to the International Monetary Fund (IMF), of the ten largest economies in the world, the U.S. dominates in both size and productivity. The highest of those ten economies, U.S. GDP is 50% larger than China (ranked #2), and the U.S. has a growing working-age population. Even though the current bull market has been panned by bears due to the dominance of tech stocks, the market has been broadening out in the last couple of months and driving other sectors higher. Smaller companies, unloved for several years, have finally been getting some attention, too, which could help extend the current bull market.

Considering that all these factors—the dominance of the U.S. economy, its productivity, and its growing working-age population—lead to strong earnings and earnings growth, Sheaff Brock believes we may be due for another long bull market run, or at least a five-year-long average one. Gilreath and Brock conclude they wouldn't bet against that potential, quoting legendary investor Warren Buffet in his 2021 annual letter to shareholders, "Never bet against America."

The 2024 Mid-Year Update also reviewed year-to-date performance of Sheaff Brock's portfolio strategies and shared the firm's market outlook for each of them in the report, which can be found on the Sheaff Brock website.

About Sheaff Brock:
Sheaff Brock is an SEC-registered, fee-only independent investment firm striving to enhance portfolios of growth- and income-oriented investors, managing $1.3 billion in assets nationwide as of 06/30/2024. Managing Director David Gilreath contributes investment commentary to CNBC.com, ThinkAdvisor, Medical Economics, and Financial Advisor magazine. Visit Sheaff Brock YouTube for more information.

Disclosure:
Sheaff Brock Investment Advisors, LLC ("SBIA") is an SEC-registered investment advisor founded in 2001. Clients or prospective clients are directed to SBIA's Form ADV Part 2A prior to deciding to participate in any portfolio or making any investment decision. The views and opinions in the preceding commentary are subject to change without notice and are as of the date of the report. There is no guarantee that any market forecast set forth in the commentary will be realized. This material represents an assessment of the market environment at a specific point in time, should not be relied upon as investment advice, and is not intended to predict or depict performance of any investment.

SOURCE Sheaff Brock Investment Advisors, LLC