{"id":224164,"date":"2021-04-10T22:29:00","date_gmt":"2021-04-10T19:29:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/how-much-higher-will-this-bull-market-go\/"},"modified":"2021-04-10T22:29:00","modified_gmt":"2021-04-10T19:29:00","slug":"how-much-higher-will-this-bull-market-go","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/how-much-higher-will-this-bull-market-go\/","title":{"rendered":"#\n  How much higher will this bull market go?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a36ebf45f949\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a36ebf45f949\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/how-much-higher-will-this-bull-market-go\/#The_lessons_of_past_US_bull_markets\" >The lessons of past U.S. bull markets<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/how-much-higher-will-this-bull-market-go\/#Mark_Hulbert\" >Mark Hulbert<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong>#<br \/>\n  How much higher will this bull market go?<br \/>\n<\/strong>&#8221;<\/p>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\"><span class=\"ez-toc-section\" id=\"The_lessons_of_past_US_bull_markets\"><\/span>\n  The lessons of past U.S. bull markets<br \/>\n<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\">\n<div class=\"article__side\">\n<div class=\"container--sticky not-active\">\n<div class=\"cx--next\">\n              <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0000226895\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       This bull market\u2019s strongest gains are behind us.<\/p>\n<p> That\u2019s the conclusion I reached upon analyzing all U.S. bull markets since 1900. The good <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a> is that, assuming the future is like the past, the current bull market still has more months of life in store. The bad news is that the stock market\u2019s gains during those months are likely to be far more modest than what we\u2019ve gotten used to over the last 12 months.<\/p>\n<div class=\"paywall\">\n       This suggests that we should not extrapolate the last 12 months\u2019 gains into the future.<\/p>\n<p>My analysis takes issue with those analysts who argue that the stock market\u2019s strength over the last 12 months is a bullish omen. In fact there\u2019s nothing particularly unusual about how strong the market was coming off its March 23, 2020, low.<\/p>\n<p>That may seem hard to believe, given that the Dow Jones Industrial Average<br \/>\n        DJIA,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/210598065\/realtime\" class=\"positive\">+0.89%<\/bg-quote><br \/>\n       gained an incredible 74.4% over the 12 months from that low. But there actually are three other bull markets since 1900 in the calendar maintained by Ned Davis Research in which the Dow rose even more over the 12 months subsequent to their beginnings. The bull market that began following the Great Financial Crisis was not one of those three, but it came close: In the 12 months following the Mar. 9, 2009, low, for example, the DJIA gained 61.4%.<\/p>\n<p>The <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a> pattern is that bull markets typically are strongest right after they\u2019re born: More than half of bull markets\u2019 total gains are produced in their first 12 months, on average. Consider the average bull market in the Ned Davis calendar. Not counting the current one, there were 37 since 1900. Of them, nine\u2014or 24%\u2014didn\u2019t make it to their first birthdays. The remaining 28 lived to be 2.7 years old and during them the DJIA gained a total of 93.9%. If the current bull market is \u201caverage,\u201d therefore, it will continue until November of next year\u2014but produce only a modest gain from now until then.<\/p>\n<p>Furthermore, the market\u2019s prospects may actually be more subdued because of its first-12-months strength. That\u2019s because there is a weak inverse correlation between a bull market\u2019s return it its first 12 months and how strong it is thereafter: Bull markets with the strongest first years tend not to last as long, or rise as far, as those bull markets that are slower to take off. (Note that this correlation is statistically weak, however, so you shouldn\u2019t make too much of it.)<\/p>\n<p><strong>What stock market return should you expect going forward?<\/strong><\/p>\n<p>What future equity return, then, should retirees and near-retirees assume in constructing their financial plans?<\/p>\n<p>The efficient market hypothesis (EMH) tells us that the stock market\u2019s expected return at any given time is independent of what has h<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ened up until that point. That\u2019s because the stock market is a forward-looking, discounting mechanism. So its future return will be a function of whether the future turns out to be better or worse than what is currently anticipated\u2014not by how the market has performed up until now.<\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<p>The stock market\u2019s has produced an inflation-adjusted total return of 6.0% annualized since 1793, according to <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/ssrn.com\/abstract=3805927\" class=\"icon none\">research conducted by Edward McQuarrie, a professor emeritus at the Leavey School of Business at Santa Clara University<\/a>. So if you were agnostic about where we are in the stock market\u2019s cycle, and assuming the future is like the past, that\u2019s the expected return to imbed in your financial plans.<\/p>\n<p>You may not adhere to the EMH, of course. Or you may worry that, since the stock market is overvalued currently according to any of a number of valuation measures, its expected return going forward is lower than average. I share that worry, as I have written in recent columns.<\/p>\n<p>But even if you don\u2019t lower your expected return assumption because of overvaluation concerns, notice that the expected equity return you should include in your financial plan rises only to 6.0% annualized on an inflation- and dividend-adjusted basis. That\u2019s still far short of what the stock market produced over the last 12 months.<\/p>\n<p>Trees don\u2019t grow to the sky, as John Maynard Keynes wrote a century ago. We forget that at our peril.<\/p>\n<p><em>Mark Hulbert is a regular contributor to MarketWatch. His <a rel=\"nofollow noopener\" target=\"_blank\" href=\"http:\/\/hulbertratings.com\/\" class=\"icon none\">Hulbert Ratings <\/a>tracks investment newsletters that pay a flat fee to be audited. He can be reached at mark@hulbertratings.com<\/em><\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>      <span>By<\/span><\/p>\n<div class=\"author  hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Mark Hulbert\",\"subhead\":\"The Wall Street Journal\",\"list\":[]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Mark_Hulbert\"><\/span>Mark Hulbert<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/p><\/div>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more News articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B21005575-02D4-D4B5-4572-D3764F695946%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# How much higher will this bull market go? &#8221; The lessons of past U.S. bull markets This bull market\u2019s strongest gains are behind us. That\u2019s the conclusion I reached upon analyzing all U.S. bull markets since 1900. The good news is that, assuming the future is like the past, the current bull market still&#8230;<\/p>\n","protected":false},"author":1,"featured_media":224165,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-224164","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/224164","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=224164"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/224164\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/224165"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=224164"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=224164"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=224164"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}