Fisher Investments UK

Nine years a bull

On 6 March, global equity markets marked the nine-year anniversary of the global financial crisis’s end and the beginning of the bull market that followed[i]. Because markets haven’t yet recaptured levels hit before a pullback began in mid-January, it is premature to say the bull market is more than nine years old — we won’t definitively know that without the benefit of more hindsight. We believe that uncertainty makes this an opportune time to discuss what typically does (and doesn’t) end bull markets — and why we believe the bull that began in March 2009 should have more life left.

Since the MSCI World Index bottomed 6 March 2009, it has returned 274.7% per cent[ii] In our ongoing review of global financial media, we have seen some pundits argue that the recent dip is the first sign of a tired bull rally nearing its end. Reasons vary — good times have gone on too long, protectionism is creeping into the global economy, central banks are no longer supportive — the list goes on.

The MSCI World’s -8.9 per cent pullback from its 11 January high to its 8 February low isn’t technically a correction — a short, sharp, sentiment driven decline exceeding -10% per cent — but it appears correction-like[iii]. In our view, people searched for causes and landed on global inflation as a big story, without much evidence of an actual problem. Then, when newer data defied the fear, people largely ignored it. Perhaps that seems strange, but it is normal for sentiment to move on so quickly in a correction.

Given recent swings, we have seen pundits question how much longer the bull can last. The presumption: it is getting old and tired. But bull markets don’t die of old age. Excluding the current bull and using America’s S&P 500 (in USD) for its long dataset, the average length of a bull market is 57 months.

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