How Much Longer Can This 7 Year Bull Market Last?

It’s been 7 years since the depth of the great recession where the stock market dropped to its lowest point in March 2009 before starting to recover. The current bull run since then is the third longest on record for U.S. stocks.

Since March of 2009 the S&P 500 stock index is up 193%. The Dow Jones industrial average grew about 159%, and the Nasdaq Composite increased the most by 266% over the same time period driven by rising technology stocks. In fact, according to USA Today, the four companies that had the most positive impact on the stock market were all tech stocks. Altogether the bull market in the States has so far created $16 trillion of value to investors, according to market research firm Wilshire Associates. The five biggest wealth generating companies in the bull market over the last 7 years are the following:

Sources: S&P Global Market Intelligence, USA TODAY

The average bull market cycle throughout history has been about 59 months. Since the current bull market we’re in has already been 84 months many investors believe the market is long overdue for another recession and are are looking for signs of a bear market in the future. We may have already seen some signs of a correction recently. Stocks in the U.S. have struggled so far this year in 2016 with the S&P 500 index already down about 3% since the start of the year.

Many experts are recommending caution and vigilance when thinking about what investments to buy right now. According to the International Monetary Fund, the world appears to be facing a risk of economic derailment after citing a report that came out of China recently which showed some weaker than expected trade data from that country.

Global economic recovery continues, but we are clearly at a delicate juncture, where risk of economic derailment has grown. Again, I think that at the recent G20 meetings in China there was broad recognition of these risks and priorities. Now is the time to decisively support economic activity and put the global economy on a sounder footing. This requires some tough choices, with advanced economies in particular needing to step up to the plate through the three-pronged approach I have described, as well as measures to make the global financial system more efficient and resilient. Winston Churchill said, “I never worry about action, but only inaction.” This is one of those moments where action—concerted action— is needed. ~ David Lipton (First Deputy Managing Director, IMF)

Peter Kenny, senior market strategist at Global Markets Advisory Group, in Berkeley Heights, New Jersey says that the stock market still has room to increase if corporate earnings and revenues can show signs of growth that would imply a stronger economy. But with a relatively weak earnings season and some concerns about global growth, especially in emerging countries, the chance that the stock market will continue it’s bull market run for another year is not likely to me. That doesn’t mean investors should panic and sell their equities and horde cash. The long term, buy-and-hold strategy still appears to work best in the long run.

This author has long positions in AAPL, GOOGL, and AMZN. However, he does not plan to hold positions in any other stock mentioned and does not plan to open any new positions in any stocks mentioned for at least 72 hours after publication of this article.

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