The current 8-year bull market in perspective

For the past 8 years, we’ve seen an almost uninterrupted increase in US stock prices. According to a note by Morgan Housel from Motley Fool, in the past 100 years there were only 4 periods that compare to this impressive run, and only one of them (in the 1920s) had a significantly better performance after 8 years.

Detailed below is a summary of Mr Housel’s analysis of the current 2009-2017 bull market versus other notable periods of price performance.

1. 1990s

The 1990’s bull market is the most similar to the current one, both in magnitude and duration. It was also predominantly based on growth stock out-performance.

Source: Motley Fool

2. 1980s

Even with a famous stock market crash in 1987, the 1982-1990 bull run was also comparable to the current one in terms of total returns.

Source: Motley Fool

3. 1950s and 1960s

The post-war period was exceptionally beneficial to the US economy, with a boom in productivity and consumer demand. It also coincided with the rise of the US as a world superpower.

Not surprisingly, the stock market had the greatest performance of the century, in a bull market that lasted 15 years. Considering the exceptional historical circumstance of the time, it’s unlikely that we’ll see a repeat of the 1950-1960 market.

Source: Motley Fool

4. 1920s

Finally, “The Roaring Twenties”, which significantly outperformed the current bull market just before the most spectacular stock market crash in US history. An equivalent performance over the past 8 years would see the Dow pass the 34,000 mark today, compared with the 20,500 level that we see at the moment.

Source: Motley Fool

So, the current 8-year bull market is clearly not unprecedented. The important question is: how long will it last?

It’s difficult to say, but at UGC we use several proven indicators to try to answer precisely this question. Over the following days, we will explore those further on this blog.

If you want to learn how to invest in stocks and analyse the market to identify profitable or deadly turning points, contact United Global Capital today for a no cost, no obligation consultation on 03 8657 7640 or email info@ugc.net.au to learn about Quality, Value, Trend (QVT) investment selection methodology.

For a small yearly fee, learn how to take advantage of the current bull market and stay ahead of the crowd, with access to market news, updates and 20-30 stock recommendations per year in the Australian and US markets!

Previously an exclusive of UGC clients, UGC Research gives you access to the proven strategies used by UGC Securities to identify high return, low risk investment opportunities.

The information contained in this article is General in nature and has been prepared without taking into account your objectives, financial situation and needs. When assessing any investment you should also consider that past performance is not a reliable indicator of future performance.

Joao Costa Pereira
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Joao Costa Pereira

Equity Research Analyst at United Global Capital
BSc Economics, MSc Finance
Joao is an Equity Research Analyst at UGC
Joao Costa Pereira
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