Celebrating the Second Anniversary of the Bull Market: A Resilient Journey
Introduction
Saturday, October 12, marks the second anniversary of the bull market that has defied expectations and showcased its resilience in the face of economic challenges. Let’s delve into the journey of this remarkable market and explore what lies ahead.
The Birth of a Bull Market
- Two years ago, the S&P 500 closed at 3,577, sparking fears of inflation and uncertainty among investors.
- Despite initial concerns, stocks rallied, signaling the birth of a bull market.
- As renowned investor John Templeton aptly put it, bull markets are born on pessimism and grow on skepticism.
The Growth of the Bull Market
- Since its inception, the S&P 500 has delivered a total return of 62% and achieved 44 record highs.
- The rally faced skepticism amidst rising interest rates, persistent inflation, and geopolitical tensions.
- Like cotton, known for its strength and resilience, this bull market has proven its durability and comfort to investors.
Charting the Progress
- The second year of the bull market saw a catch-up phase after a 21.6% gain in its first year.
- Low volatility has been a defining feature, with a maximum drawdown of only 10.3%.
- The market has outperformed the average drawdown of previous bull markets.
What’s Next?
- Historically, bull markets tend to last an average of 61 months, with annualized returns tapering off in the later years.
- The current 27.2% annualized return suggests positive but potentially subdued returns in the future.
- Investors should prepare for a phase of tempered growth as the bull market matures.
Conclusion
- The resilience of this bull market amidst macroeconomic challenges is commendable.
- While volatility may rise in the short term, maintaining a neutral stance on equities is prudent.
- Stay informed with LPL Research’s upcoming Weekly Market Commentary for insights into the market’s second anniversary celebration.
This rewritten content provides a comprehensive overview of the bull market’s journey, highlighting its key milestones and future outlook. It emphasizes the market’s resilience, growth potential, and the importance of staying informed to navigate the evolving financial landscape.