How many years does a bull market last?
3. How long the average bull market lasts. As much as investors would like the answer to this question to be "forever," bull markets tend to run for just under four years. The average bull market duration, since 1932, is 3.8 years, according to market research firm InvesTech Research.
Bull markets on average last more than 1,700 days, or longer than four years, the data shows. The median length of a bull run is just north of 1,500 days. By comparison, the current run has lasted about 15 months, or under a year and a half, thus far.
Economic growth actually accelerated above its 10-year average in 2023. That resilience, coupled with a fascination about artificial intelligence (AI), changed investors' collective mood. The S&P 500 soared throughout the year and finally reached a new high in January 2024, making the new bull market official.
A bull market occurs when securities are on the rise, while a bear market occurs when securities fall for a sustained period of time. It's important to understand the differences between bull and bear markets and how they impact your investment decisions.
With potential economic threats remaining and market uncertainties looming in 2024, investors may still need to have patience before a truly durable bull market can get underway. But that doesn't mean there aren't any opportunities today.
Economic downturn or recession
However, economic indicators can change, and if there are signs of an economic downturn or recession, it can trigger a reversal in market sentiment. Factors such as slowing economic growth, rising inflation, or geopolitical tensions can contribute to the end of a bull run.
| Rank | Bull Markets | Return |
|---|---|---|
| 1 | Tech boom bull market (1987-2000) | 582.15% |
| 2 | Post-financial crisis recovery bull market (2009-2020) | 400.52% |
| 3 | Post-World War II expansion bull market (1949-1956) | 266.35% |
| 4 | Reaganomics bull market (1982-1987) | 228.81% |
For now at least, analysts are anticipating S&P 500 earnings growth will continue to accelerate in the first half of 2024. Analysts project S&P 500 earnings will grow 3.9% year-over-year in the first quarter and another 9% in the second quarter.
"Some traders predict a flat or down market in the first half of 2024 due to high inflation, recession fears and rate hikes from the Fed. However, others foresee a bull market continuing, citing potential Fed rate cuts, earnings growth and historical trends around election years."
The S&P 500 generated an impressive 26.29% total return in 2023, rebounding from an 18.11% setback in 2022. Heading into 2024, investors are optimistic the same macroeconomic tailwinds that fueled the stock market's 2023 rally will propel the S&P 500 to new all-time highs in 2024.
Is it better to buy in a bull or bear market?
Bull markets tend to last longer than bear markets with an average duration of 6.6 years. The average duration of a bear market is 1.3 years. The average cumulative gain over the course of a bull market is 339%. The average cumulative loss over the course of a bear market is 38%.
The longest bear market lingered for three years, from 1946 to 1949. Taking the past 12 bear markets into consideration, the average length of a bear market is about 14 months. How bad has the average bear been? The shallowest bear market loss took place in 1990, when the S&P 500 lost around 20%.
It defines a bear market as a decline of at least 20% in the S&P 500 from its previous peak. It ends when the index reaches its low before then going on to set a new high. S&P uses closing prices for its calculations. Bull markets in both stocks and bonds are far more common than bear markets.
Experts with the Motley Fool suggest allocating an even higher percentage to stocks until at least age 50 since 50-year-olds still have more than a decade until retirement to ride out any market volatility.
Key Takeaways. While holding or moving to cash might feel good mentally and help avoid short-term stock market volatility, it is unlikely to be wise over the long term. Once you cash out a stock that's dropped in price, you move from a paper loss to an actual loss.
Since 1928, the index's 27 bear markets have lasted an average of 286 days, while its average bull market has lasted 1,011 days, they added. If the new bull market were to last as long as the average bull, it would extend to July 2025, the strategists concluded.
You should always stay on the same side of momentum. So, you can buy high and wait for the stock to go higher; or you can use dips to buy. Either ways, you should never try to outguess the market. In a bull market, the very idea of selling against momentum can land you in big losses.
On average, bull markets have gained 115% over 2.7 years while bear markets have lost 35% and lasted less than a year. Are we in a bull market? It could take weeks or months for the market to move 20% off a low.
Why do they advise against checking balances so frequently, especially in a bull market? Anne Tergesen: When people check very often they can subsequently engage in suboptimal behaviors. There are academic studies that show that the more people look at their 401(k)s, the lower their long-term returns are likely to be.
When did the bull market start? The current bull market started in October 2022, when the S&P 500 reached its most recent low. Since then, the index has swelled about 35 percent.
How long has the US been in a bear market?
| Bear Market Period | Duration | Total S&P 500 Decline |
|---|---|---|
| March 2000 to October 2002 | 31 months | -49% |
| October 2007 to March 2009 | 17 months | -56% |
| February 2020 to March 2020 | 1 month | -34% |
| January 2022 to October 2022 | 10 months | -25% |
Pamplona's annual nine-day Fiesta de San Fermín began in Spain last week. The festival, including the famous running of the bulls, attracts thousands of visitors to Pamplona every year.
The S&P 500 still has 30% upside between now and the end of 2025, according to Capital Economics. "Our end-2025 forecast of 6,500 for the index is premised on its valuation reaching a similar level to its peak during the dot com mania," Capital Economics said.
U.S. stock returns: 2023 optimism carries forward
This heightened optimism is on par with the positive outlook in December 2021, when investors anticipated a 6% stock market return for 2022. Investor expectations for stock returns over the long run (defined as the next 10 years) rose slightly to 7.2%.
| Stock | Expected Change in Stock Price* |
|---|---|
| Tesla Inc. (TSLA) | 61% |
| Mastercard Inc. (MA) | 14.2% |
| Salesforce Inc. (CRM) | 7.2% |
| Advanced Micro Devices Inc. (AMD) | 11.3% |
