It's been one of the best decades, ever, to be an investor in the U.S. stock market.
The U.S. economy has been growing for 10 straight years and, as of July, this expansion is now the longest in history. And that's not the only record this economy has set, either. The bull market in stocks, meaning a market where investment prices are rising, passed the 10-year mark earlier this year—and, in July, became the longest ever.
Here's a closer look at those achievements.
The economy goes through distinguishable stages, depending on whether gross domestic product—also known as GDP, or the sum of the value of all goods and services produced—is growing quickly or slowly, or even contracting.
Each of these stages—from expansion to peak to contraction to trough—can last anywhere from months to several years. Measured from peak to peak, the average length of an economic cycle is nearly five years.
America has now been in one stage—expansion—for as long as it typically takes the economy to go through two complete cycles.
Here's how the current economic expansion stacks up against others on record:
Just as the economy goes through cycles, so does the stock market. In a bull market, prices trend up, and in a bear market, stock prices fall (or an index falls) at least 20% from a recent high.
The last bear market was between October 2007 and March 2009, when the S&P 500—the benchmark for the U.S. stock market—fell almost 57%. Since then, stock prices have been rising and haven't dropped more than 20%, based on closing levels. There were two close calls, however, in mid-2011 and late 2018.
Here's how the current bull market stacks up against others on record:
The return for the S&P 500 doesn't tell the full story of why the past 10 years have been so rewarding for investors.
You can earn dividends, or cash payouts for corporate earnings, on your investments. And if you reinvest those dividends to buy additional shares, your returns will be even greater. When considering returns including reinvested dividends, or total return, the S&P 500 has risen more than 440% since March 2009.
Investors have also seen trading costs have come down over the last decade. And they have access to an increasing number of low-cost investment options like ETFs, which are investment funds tied to the performance of an underlying index.
Even with some of its ups and downs, the past decade has been one of the best, ever, to be an investor. While investors can't expect every decade to be like the last, it's an important reminder of why you should continue adding money to the stock market over time and stay invested.
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