The Bull Market Just Turned 10. What’s Next?


The current bull market is hitting double digits this month, continuing what’s considered by certain calculations to be the longest runup for stocks in history.

Since hitting the bottom of the Great Recession on March 9, 2009, Standard & Poor’s 500-stock index has more than recovered from its preceding bear-market losses of about 57 percent, posting a total gain of 310 percent, as of early March. Translation: If you invested $1,000 in an index fund that tracked the S&P 500 index 10 years ago, you’d have $3,100 today. Not bad, huh?

While that’s an undeniably impressive return, we’ve seen plenty of volatility along the way.

Back up. What’s a bull market again?

Bull markets are widely considered to be periods in which major indexes, like the S&P 500 or the Dow Jones industrial average, rise at least 20 percent and continue upward without falling by more 20 percent from recent highs.

And what is volatility?

It’s the up-and-down movements of the market, which, while totally normal, can be nerve-wracking for many investors. One way of measuring volatility is by tracking the volatility index, or VIX, which measures the expected price swings of the S&P 500 over the next 30 days. The higher the value of the VIX, the greater the expected volatility, and vice versa. For example, in late 2008, it was peaking above 80; in 2017, it was hovering around 9.

After that pretty chill year, we had a rockier ride, with the VIX spiking up to 36 in December 2018. Indeed, the S&P 500 shed about 15.7 percent from the beginning of the month through Christmas Eve. And plenty of other bouts of high volatility have hit the market over the last 10 years.

What are some headwinds this bull has faced?

Take your pick. Stocks have been blown back periodically by a variety of major factors, including Brexit, rising interest rates and trade disputes. Day-to-day market movements have also been pushed by smaller incidents, such as surprising tweets from the likes of Elon Musk and President Donald Trump and disappointing earnings reports from certain well-followed companies.

But through it all, the bull has continued to charge, albeit at more of a limping pace at times.

So, how much longer can this bull run?

Depends who you ask. Some experts might note that, technically, certain indexes did fall by 20 percent in December, thereby ending the bull market. Many others don’t count that drop as an end because of the market’s quick recovery. But so far in 2019, the S&P 500 is up by about 11 percent—back to the level it was at before the December dip. And many believe this old bull still has some room to run.

Age alone doesn't kill the bull,” Julian Emanuel, chief equity and derivative strategist at BTIG, told CNBC, for example. “The conditions are definitely set up for a positive year, especially given last year's setback.”

What does that mean for my investments?

Where we are in the bull-bear market cycle should have little to no influence on your own investing strategy. That should be carefully devised based on your own personal financial situation and future goals and include a well-diversified portfolio that can carry you through all the market’s ups and downs.