We're now eight years removed from the market bottoms of 2009. March 9 has come to represent an anniversary of sorts—the day markets started moving in the right direction following a year’s worth of upheaval. As in previous years, this occasion was marked by the usual onslaught of articles pontificating about how much steam this bull market has left in it. Yet, that repetitive angle, while tempting, seems to miss a critical point.
In former editions of what feels like an annual March 8 bull market commentary I typically reference the length of this latest bull market and its place in history. I’ve always found a historical perspective more valuable than the fear-mongering click bait produced by financial journalists desperately searching for retweets. Predictably, you get the "Is This Bull on Its Last Leg?” or "Bear Market Ahead?" headlines designed to be more provocative than substantive, but I don’t begrudge anybody from making a living.
After all, I myself had a momentary stint as a journalist a long time ago. I understand how hard it is to write new and engaging material on dry topics where the only time the masses pay attention is when the news isn't so welcoming. However, as a certified financial planner, my intuition tells me that there’s a more relevant angle to this story. Asking how much longer the current run can last is logical, but is it the right question? Perhaps the more applicable question should be:
On the Anniversary of This Current Bull Market, Should Any Long-Term Investor Care?
Admittedly, it’s a loaded question because the premise applies only to long-term investors, a point to which I would argue “any monies invested in the stocks should presumably be for the long-term," further defined as a period not less than at least five years. Still, a time frame of five, 10 or even 20 years might not be the most accurate representation. For many of us, an investment lifetime begins in our 20s and can last long into retirement. (For related reading, see: 10 Tips for the Successful Long-Term Investor.)
These realizations suggest that looking at things through the lens of bull vs. bear markets really doesn’t make all that much sense, providing you agree that over time markets reward long-term, disciplined investors. The impact of missing even just a few of the good days is well chronicled, and thereby suggests that time is the ally of the long-term investor and market timing is the adversary.
Bulls, Bears and Some Perspective
The usual definition of a bear market is when stocks decline by 20% from their peaks over a two-month period. From the 1990s until today the S&P 500 has gone from a long bull market to a momentary bear, back to a five-year bull before the most recent bear market of 2008, and finally arriving at our current eight-year bull market. That’s five changes in total, spanning the course of over 26 years. Long-term investors should accept the historical fact that markets fluctuate. None of us has to think about the prospect of any looming bear market. We need only to accept them as part and parcel to a greater end. (For more from this author, see: Don't Let Dire Forecasts Keep You on the Sidelines.)