We're Officially in the Longest-Running Bull Market Ever—Now What?


“Can't stop, won't stop” might just be the tagline for the current bull market. Despite numerous potential show-stoppers—from rising interest rates to Brexit to a host of political dramas, including an entire trade war—stocks have continued to perform positively overall.

In fact, the 9-year-old bull is crossing a major milestone: On August 22, its relentless march will have lasted 3,453 days, one day longer than the dotcom-fueled bull of the 1990s. That makes it the longest bull run in history.

Back up. What’s a bull market again?

Bull markets are generally defined as a period in which the value of the market—measured by a major index such as Standard & Poor’s 500-stock index or the Dow Jones industrial average—rises at least 20 percent and continues upward without a drop of more than 20 percent (the widely accepted measure of a bear market).

Stock prices rose more than 20 percent in 2009, and have been on a mostly upward course since. From its March 2009 low, the S&P 500 has gained more than 320 percent, and the Dow has risen about 290 percent—setting new records often. On August 21, the S&P 500 hit an all-time, intraday high, besting its previous high in late January 2018. The Nasdaq, a tech-focused index, is about .5 percent from a record of its own.

So, uh, when's this party gonna end?

So far in 2018, the bull has been running at less of a full charge and at more of a gasping, stop-and-go gallop. Year-to-date, the S&P 500 and Dow are up about 7 percent and 4.5 percent, respectively, but with plenty of dips and spikes thrown in along the way.

Still, there may be some more room to run. “The fundamentals of the economy are still looking robust with record-low unemployment, strong corporate earnings and the impact of the late 2017 tax cuts continuing to stimulate the economy,” says Certified Financial Planner Natalie Colley of Francis Financial in New York. “Those fundamentals do support continued market growth.”

What should I do with my portfolio?

Ignore the market’s milestones, and stick with your strategy. “It’s fun to mark these new records in market performance, but I’d discourage anyone from dwelling too much on any single data point or event,” Colley says. “Focus on time in the market rather than timing the market.”

That said, you shouldn’t necessarily do nothing. Even if your long-term plans remain unchanged—and you don’t need cash from investments for at least a few years—you still may want to rebalance, as major stock growth can send your portfolio’s asset allocation out of whack.

For example, you may want a mix that’s 80 percent stocks and 20 percent bonds. But if your stocks make strong gains, they’ll account for more of your portfolio. So you may want to sell some stocks and buy more bonds to get back to an 80/20 split.

Will we have another bear market?

It’s likely to happen—at some point. After all, what goes up usually goes down eventually. The good news is that bears typically last a little over a year and stocks have recovered from each one, historically, and gone on to make significant gains since.