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9 Years And Counting: Looking Back On The Bull Market


  • It has been nine years since the S&P 500 Index hit its bear market low, and some investors may worry that the party for stocks could soon end.
  • However, we argue that not all bull markets are the same. Macroeconomic concerns, low interest rates and subdued volatility, among other things, have worked to skew the market’s recovery.
  • As such, we believe a return to more natural market conditions and earnings growth should help support stocks in the near term.

By Adam Schor

Today marks the ninth anniversary of the market low during the Global Financial Crisis, but not everyone may be in a party mood. The recent 10% pullback in the S&P 500 Index and the return of volatility has likely startled some investors. Indeed, for some, today's anniversary could be a negative omen, fueling fears that the end of one of the longest bull market's in history is near, rather than heralding continued momentum and strength.

We still see strength ahead. Here, we explore several key lessons from the last nine years, and offer three reasons for why we remain optimistic about the future for equities.

Key Lessons

Nine years ago, market sentiment was in the doldrums. Major U.S. banks were about to report the results of their "stress tests," which measure how banks might cope with an economic and market shock. The world's financial system appeared broken, and, as a result, there was talk of a depression, not a recession. For many indices, price-to-earnings ratios were close to single digits.

Of course, we eventually began to rebound from these dire conditions. But we have had a long way to climb - with still more to potentially go. Consider: Even though stocks have been on an upward trajectory, the 10-year, rolling average returns for U.S. and world markets have been below average for the past decade.

Room to Climb

Trailing 10-year returns (%) for U.S. and global equities have rebounded since 2009, but are still below the long-term average.

Source: Bloomberg. Data reflect rolling, ten-year average returns (%) on a monthly basis and are from 1/31/90 to 2/28/18.

Not all bull markets are the same, and the run from 2009 had some surprising aspects. In the wake of the financial crisis, macroeconomic factors tended to drive market moves and defensive strategies

This article was written by

Janus Henderson Investors exists to help clients achieve their long-term financial goals. Formed in 2017 from the merger between Janus Capital Group and Henderson Global Investors, we are committed to adding value through active management. For us, active is more than our investment approach – it is the way we translate ideas into action, how we communicate our views and the partnerships we build in order to create the best outcomes for clients. While our investment managers have the flexibility to follow approaches best suited to their areas of expertise, overall our people come together as a team. This is reflected in our Knowledge. Shared ethos, which informs the dialogue across the business and drives our commitment to empowering clients to make better investment and business decisions.www.janushenderson.com

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Comments (4)

Is anyone else long SVXY
just have sold them today
I love the comments about the 9 year hull market? So the 21% drop in 2011 (intraday high to low) didn’t count as a cyclical bear market within a secular bull. Now making it 7 1/2 years into the next cycle. If we include 15%+ drops we had one in 2010 and more recently from 2015 into 2016. Meaning that would be a refresh and we are now only 2 years in to a cyclical bull within a secular bull.
I think the problem with the graph is that it suggests that stock market returns *should* move toward the average. But it is possible that is not the case.
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