I’m sure a lot of folks thought we were crazy at first…
Chaikin Analytics founder Marc Chaikin first declared that we were “now in the early days of an incredibly bullish setup” in late January. And we’ve maintained that view ever since then.
But it wasn’t a popular call to make at the time…
Stocks were coming off their worst year since the 2008 financial crisis. The S&P 500 Index fell around 19% in 2022. And the tech-heavy Nasdaq Composite Index plunged about 33%.
And of course, higher interest rates and elevated inflation led to plenty of uncertainty.
But as of last Thursday… we’re officially in a new bull market.
The S&P 500 closed at roughly 4,294 that day. That’s 20% higher than its October 2022 low of around 3,577. (An “official” bull market is a 20% gain from the market’s latest low.)
That’s a great sign for us as investors.
As we’ll discuss today, we don’t believe the rally is close to ending. And importantly, it nearly always pays off to be a “bull” over a “bear” – especially over the long term…
Let’s start with a chart of the S&P 500. As you can see, the index’s latest uptrend started last October…
Now, I need to make one thing clear…
Just because we’re in a bull market doesn’t mean things haven’t been volatile. Since October, several violent pullbacks have scared a lot of investors out of the action.
You can see what I mean on the chart above. Notice the drops last December and from February into March. The S&P 500 fell more than 7% both times before recovering.
At the end of the day, bull markets last significantly longer than bear markets. And you can make a lot of money if you play them correctly…
According to the Associated Press, the average bull market since 1932 is about five years. And during those bull markets, the S&P 500 has gained an average of about 178%.
Meanwhile, the average bear market since 1929 is slightly less than 20 months.
Things are looking up for the economy in general, too…
Goldman Sachs recently changed its stance in a positive way. The investment bank cut its likelihood of a recession in the U.S. this year from 35% down to only 25%.
Time is working against the market bears right now…
We officially entered a bull market last Thursday. Based on history, we can expect it to last several years. And we could see triple-digit gains as everything plays out.
Now, I suspect that the market will remain volatile in the days ahead. And the mainstream media will likely use that volatility to create scary headlines.
But don’t let that paralyze you…
Even if we enter another bear market cycle, history says it will likely last a fraction of the next bull market. So stay positive, keep investing, and you’ll do well over the long term.
Good investing,
Briton Hill
