Stock Rally To Continue?

Many are asking if the current bull market will stay intact for a longer period of time. The chart below portrays that it could be in the works for a while longer. The chart breaks down bull market returns, bear market returns and “round-trip” returns since 1928. The current bull market that began on March 9, 2009, is up 178%. The last bear market (October 9, 2007 – March 9, 2009) fell 57%. The “round-trip” (October 9, 2007 – March 9, 2014) return is at 20% while the average “round-trip” returns comes in at 54%. The chart explains a “round-trip” being a timeframe from the beginning of a bear market to the end of the next bull market.

This stock rally has lasted longer than the historical average but the preceding bear market was much steeper than the average and the “round-trip” gains are near the median but much lower than the average. This translates to a possible continuance of the rally based on historical bear and bull markets.

If history repeats itself, we could see more of this up market in play. Previous bulls that survived to a sixth year posted much larger gains.

S&P 500 Bear and Bull Market Performance, since 1928
Cumulative Performance