Nine year bull

[kgtest]

I read somewhere that Friday was the nine year mark for this current bull market. Not sure if that is true. I've only been invested since 2007 (when I had access to very first 401k). I remember when I found this group back then, someone had suggested I move my money into some bonds.

Back then I didn't even know what a bond was then but I did. I think it was in 2008 that I went to a stock index fund.

Strange I've really only known a bull market this far into my investing career, but I did see the impact of 2000, 2006/2007 and know that history does repeat itself eventually.

Not sure how long the other "long" bull runs lasted but it would be neat to see.

I hope it keeps going to 11,12, or 14 year run. I still have 13yrs before SofR is an issue, Hopefully the matador doesn't put this guy to sleep before then. I don't want a 13 yr bull, I don't like the # 13 lol

 

[Midpack]

Fundamentals are still good, so barring a geopolitical disaster the bull could continue. But we’ll all be surprised in time. Buy and hold has always been the best approach for most. Chart below thru Sept 15. Lsbcal may stop by soon with a more up to date chart.

 

[cyber888]

It could run another 5 years

 

[HadEnuff]

I read somewhere that Friday was the nine year mark for this current bull market. Not sure if that is true. I've only been invested since 2007 (when I had access to very first 401k). I remember when I found this group back then, someone had suggested I move my money into some bonds.

Back then I didn't even know what a bond was then but I did. I think it was in 2008 that I went to a stock index fund.

Strange I've really only known a bull market this far into my investing career, but I did see the impact of 2000, 2006/2007 and know that history does repeat itself eventually.

Not sure how long the other "long" bull runs lasted but it would be neat to see.

I hope it keeps going to 11,12, or 14 year run. I still have 13yrs before SofR is an issue, Hopefully the matador doesn't put this guy to sleep before then. I don't want a 13 yr bull, I don't like the # 13 lol

Actually, if you are going to be accumulating for another 13 years, now would be a perfect time (for you) for a Bear. You can spend a few years buying on the cheap before the next run-up.

 

[DAYDREAMER]

I'm hoping for the bear to come out of the cave come 2019 when we start doing Roth conversions. Will be able to convert more shares at a cheaper price, thus, paying less taxes. Then when bull comes back, all the converted shares grow tax free. There is always a silver lining.

 

[FIRE'd@51]

Not sure how long the other "long" bull runs lasted but it would be neat to see.

Take a look at 1982-1999. Compound annual return = 18.5% from the end of 1981 until the end of 1999.

 

[kgtest]

Actually, if you are going to be accumulating for another 13 years, now would be a perfect time (for you) for a Bear. You can spend a few years buying on the cheap before the next run-up.

True! Good point. I sort of cram everything I can in and close my eyes lol. So far it's been a fairly stable mix of RE and Stocks. Life creep has a slight hold with 2 kids. I never wish for negative news though, but if I had a buy low opportunity I wouldn't mind. Then again if the bull went another five years, and THEN I had a buying opportunity I wouldn't mind that either lol

Either way, there will be another buying opportunity as soon as i check my crystal ball.

 

[kgtest]

Fundamentals are still good, so barring a geopolitical disaster the bull could continue. But we’ll all be surprised in time. Buy and hold has always been the best approach for most. Chart below thru Sept 15. Lsbcal may stop by soon with a more up to date chart.

This visual is amazing.

 

[Done]

Lsbcal may stop by soon with a more up to date chart.

That chart really puts things into perspective, thanks. Here's one updated through 2017.
https://www.ftportfolios.com/Common...tentGUID=4ecfa978-d0bb-4924-92c8-628ff9bfe12d

 

[W2R]

I read somewhere that Friday was the nine year mark for this current bull market. Not sure if that is true. I've only been invested since 2007 (when I had access to very first 401k). I remember when I found this group back then, someone had suggested I move my money into some bonds.

Back then I didn't even know what a bond was then but I did. I think it was in 2008 that I went to a stock index fund.

Strange I've really only known a bull market this far into my investing career, but I did see the impact of 2000, 2006/2007 and know that history does repeat itself eventually.

Not sure how long the other "long" bull runs lasted but it would be neat to see.

I hope it keeps going to 11,12, or 14 year run. I still have 13yrs before SofR is an issue, Hopefully the matador doesn't put this guy to sleep before then. I don't want a 13 yr bull, I don't like the # 13 lol

Just remember that when you are buying into the market, you are buying both bulls and bears for the future. Not a big deal! The market goes up, and down, over and over. Most of us still do fine either way, buying low in a bear for example.

If you assume that will be the case, and invest accordingly, I think you will be able to handle the next bear with greater equanimity.

Consider moving towards slightly less volatile investments when you get closer to retirement. With risk comes reward, but by retirement many of us feel we have "won the game" and prefer less risk and reward.

Worried about Sequence of Returns Risk? Well, just assume the worst and when you get closer to retirement, put a little cash aside to help deal with expenses during an immediate crash if/when it happens, for a few years anyway. Do what you can to minimize your bare bones expenses in retirement.

 

[NW-Bound]

Fundamentals are still good, so barring a geopolitical disaster the bull could continue. But we’ll all be surprised in time. Buy and hold has always been the best approach for most. Chart below thru Sept 15. Lsbcal may stop by soon with a more up to date chart.

This visual is amazing.

That chart really puts things into perspective, thanks. Here's one updated through 2017.
https://www.ftportfolios.com/Common...tentGUID=4ecfa978-d0bb-4924-92c8-628ff9bfe12d

As much a stock lover as I am, that chart has something that bothers me. I went through the "Lost Decade" of 2000-2010, and I know things were not as benign as this chart shows. Something is amiss!

Thinking about it a bit, I saw the answer. The way the data is presented, it is very misleading. Here's how.

Suppose the market dropped quickly, losing 50% in a year. It then rebounded to 1.5x, and recovered most of that loss. Suppose the market then inched up slowly and took 9 years to recover to its old high.

What the chart will show you is a quick blip of bear market of 1 year worth, then followed by 9 years of bull. The orange area looks a lot less than the area painted blue, but in fact the market took 10 years to recover its high.

Indeed, if you bought at the market high in early 2000, it would be late 2011 before you were made whole, and that was with dividends reinvested. If you took inflation into consideration, you still lost, and had to wait to 2012 to get even. Check it out for yourself, using Morningstar which includes dividends in the return.

None of the above was obvious in the chart, if you look at the above period that I described. They do not call it "The Lost Decade" for nothing.

A bear market is good for accumulators, as many posters here who are retired now were still working during the "Lost Decade" and were able to buy cheap stocks. It was less rosy for people already retired, although rebalancing between stock/bond/cash helped some.

Now, I still have a lot of stock (65%), and will not sell everything. I just temper my expectation looking forward.

 

[ownyourfuture]

As much a stock lover as I am, that chart has something that bothers me. I went through the "Lost Decade" of 2000-2010, and I know things were not as benign as this chart shows. Something is amiss!

Thinking about it a bit, I saw the answer. The way the data is presented, it is very misleading. Here's how.

Very interesting!

 

[kgtest]

As much a stock lover as I am, that chart has something that bothers me. I went through the "Lost Decade" of 2000-2010, and I know things were not as benign as this chart shows. Something is amiss!

Thinking about it a bit, I saw the answer. The way the data is presented, it is very misleading. Here's how.

Suppose the market dropped quickly, losing 50% in a year. It then rebounded to 1.5x, and recovered most of that loss. Suppose the market then inched up slowly and took 9 years to recover to its old high.

What the chart will show you is a quick blip of bear market of 1 year worth, then followed by 9 years of bull. The orange area looks a lot less than the area painted blue, but in fact the market took 10 years to recover its high.

They need a different color for each recovery, and correlate it to the bull. I pickup what you are throwing down NW. Sort of a hot/cold type of gauge to show you how LONG the recovery took.

 

[USGrant1962]

As much a stock lover as I am, that chart has something that bothers me. I went through the "Lost Decade" of 2000-2010, and I know things were not as benign as this chart shows. Something is amiss!

Yes, I like that chart but don't know exactly what to make of it either. This Inflation Adjusted S&P500 chart is reality (for prices, not dividends). Inflation Adjusted S&P 500 Your lost decade is obvious.

 

[NW-Bound]

Yes, I like that chart but don't know exactly what to make of it either. This Inflation Adjusted S&P500 chart is reality (for prices, not dividends). Inflation Adjusted S&P 500 Your lost decade is obvious.

As you noted, dividends were not included. If they were, this chart would be a better indication. The earlier chart shows total return.

But as it is, this chart is too pessimistic, the reason being that in the past the dividend yield was as high as 8-10%. Leaving that out makes the stock market look terrible while it was not. For example, the chart shows that it took until the mid 50s for the market to recover to the 1929 high, or about 26 years. In reality, one could live very well on the stock dividends during those 26 years.

When I first started to educate myself about stock investing in the 80s, I did not know about the effects of dividends, and this kind of charts scared me off.

What we need is a chart that is inflation-adjusted, and of the total return.

 

[Independent]

As much a stock lover as I am, that chart has something that bothers me. I went through the "Lost Decade" of 2000-2010, and I know things were not as benign as this chart shows. Something is amiss!

Thinking about it a bit, I saw the answer. The way the data is presented, it is very misleading. Here's how.

Suppose the market dropped quickly, losing 50% in a year. It then rebounded to 1.5x, and recovered most of that loss. Suppose the market then inched up slowly and took 9 years to recover to its old high.

What the chart will show you is a quick blip of bear market of 1 year worth, then followed by 9 years of bull. The orange area looks a lot less than the area painted blue, but in fact the market took 10 years to recover its high.

Indeed, if you bought at the market high in early 2000, it would be late 2011 before you were made whole, and that was with dividends reinvested. If you took inflation into consideration, you still lost, and had to wait to 2012 to get even. Check it out for yourself, using Morningstar which includes dividends in the return.

None of the above was obvious in the chart, if you look at the above period that I described. They do not call it "The Lost Decade" for nothing.

A bear market is good for accumulators, as many posters here who are retired now were still working during the "Lost Decade" and were able to buy cheap stocks. It was less rosy for people already retired, although rebalancing between stock/bond/cash helped some.

Now, I still have a lot of stock (65%), and will not sell everything. I just temper my expectation looking forward.

+1

Visually, your eye is drawn to the areas of the bull/bear segments. But the area (growth x time) is meaningless.

For the long term investor, the only thing that matters is the growth. It doesn't matter whether the growth occurred over a 10 month period or a 10 year period. But on the chart, the second would look way more impressive than the first.

 

[Clone]

This Inflation Adjusted S&P500 chart is reality (for prices, not dividends). Inflation Adjusted S&P 500 Your lost decade is obvious.

The folks who were spending money from their portfolios suffered that 'lost decade' because of a sequence of returns type problem. (If I understand the terminology correctly.)

Where I have retired from mega-corp, my second career and circumstances are such that I am still in accumulation mode. My ability to contribute (and actual contributions) during that time frame increased significantly. Thus, my portfolio benefited greatly from adding to my investments during that same time frame. In particular, those contributions made during the 2007-2010 period have performed exceedingly well.

 

[NW-Bound]

During the time period of 2000-2012, I was working part-time on/off and my wife did not ER until 2005. With two children in college in that time frame, I did not have much extra money to save, but not having to dip into the stash helped a lot. The earned income also gave me some confidence to take a more aggressive investment style.

Having survived that terrible period and even prospered, I will try to remind myself to be take a more conservative stance after this nine-year bull. But then, I have more money now, and also have SS on tap. The effect of the big bad sequence of returns would be subdued, I think.

 

[RenoJay]

I think there have been some good points about why the chart presented does not very accurately represent how badly a Bear market can hurt. (If you're 100% equities, waiting 5 - 15 years to get back to even is pretty hard.) But here's another point...the chart is wrong in its percentages. For instance, for the 2000 - 2002 bear, it shows a drop of 24.8%. But that's simply not nearly accurate. The S&P 500 fell nearly 50% from peak to trough. In the Great Recession, the drop was ~55%, not the 50% shown on the chart. Perhaps the chart is simply measuring from Jan. 1 - Dec. 31 or something like that, but I do not believe it's accurate. When half your wealth evaporates, you don't tend to care what dates accompany it.

The link below will take you to an article that shows the actual point drops and percentage drops from each bear.

11 historic bear markets - Business - Stocks & economy | NBC News

And here's another point. According to this article, there have been 35 bear markets between 1900 - 2013. I know those dates don't overlap precisely with the chart, however, I only count 8 bear markets on the chart. Something is really fishy here.

https://www.cnbc.com/2015/08/24/8-things-you-need-to-know-about-bear-markets.html

 

[kgtest]

I think there have been some good points about why the chart presented does not very accurately represent how badly a Bear market can hurt. (If you're 100% equities, waiting 5 - 15 years to get back to even is pretty hard.) But here's another point...the chart is wrong in its percentages. For instance, for the 2000 - 2002 bear, it shows a drop of 24.8%. But that's simply not nearly accurate. The S&P 500 fell nearly 50% from peak to trough. In the Great Recession, the drop was ~55%, not the 50% shown on the chart. Perhaps the chart is simply measuring from Jan. 1 - Dec. 31 or something like that, but I do not believe it's accurate. When half your wealth evaporates, you don't tend to care what dates accompany it.

The link below will take you to an article that shows the actual point drops and percentage drops from each bear.

11 historic bear markets - Business - Stocks & economy | NBC News

And here's another point. According to this article, there have been 35 bear markets between 1900 - 2013. I know those dates don't overlap precisely with the chart, however, I only count 8 bear markets on the chart. Something is really fishy here.

https://www.cnbc.com/2015/08/24/8-things-you-need-to-know-about-bear-markets.html

Not so amazing....

 

[DrRoy]

But here's another point...the chart is wrong in its percentages. For instance, for the 2000 - 2002 bear, it shows a drop of 24.8%. But that's simply not nearly accurate. The S&P 500 fell nearly 50% from peak to trough. In the Great Recession, the drop was ~55%, not the 50% shown on the chart.

I think this is due to the chart reporting total return, so it is counting dividends and that reduces the loss %.

 

[target2019]

And here's another point. According to this article, there have been 35 bear markets between 1900 - 2013. I know those dates don't overlap precisely with the chart, however, I only count 8 bear markets on the chart. Something is really fishy here.

First article looks at notable bear markets (stock market). Second article is looking at recessions (GDP).

 

[RenoJay]

I think this is due to the chart reporting total return, so it is counting dividends and that reduces the loss %.

I thought it may be because of dividends, but that would not account for being off by half in the 2000 - 2002 bear market. That stat is simply wrong.

 

[Goldendoodlebug]

U

 

[audreyh1]

I thought it may be because of dividends, but that would not account for being off by half in the 2000 - 2002 bear market. That stat is simply wrong.

I agree - the S&P500 index dropped 50% from the peak in April 2000 to the low in Oct of 2002. So how could a 24% drop be shown for that period? The S&P500 was yielding just above 1% at the start of the drop, so to be generous add 5% back for 2.5 years of dividends - still way off.

One thing I really don't like about that graph is that it doesn't show how long it takes to recover prior peaks. It makes the statement that "the average bear market lasted 1.3 years" but that is only when it finally stopped going down! From Oct 2002, it took until Oct of 2007 to finally reach the April 2000 peak - ironically the same month - just barely exceeded before having and even worse bear market! So 5 years.

If you take into account returns (dividends) it shortens the time a bit to 4 years, 7 months (April 2007). From Oct 2007 it took until March of 2013, 5.5 years, with dividends reinvested to recover the peak.

So folks thinking about how long to recover from a bear market might consider ~5 years to not be uncommon for recovering from a bad bear market, and that doesn't include inflation.

Of course that is for a 100% S&P500 portfolio. If you have an asset allocation including cash and bonds as well as stock, and rebalanced when stocks were down, it can be shorter. Our retirement fund had recovered its Oct 2007 peak by the end of 2010 - just a little over 3 years.