February Market Insight

Happy Birthday Bull!

On the heels of another positive month in the market where virtually every asset class was positive, we prepare to recognize a remarkable milestone. The longest bull market in history is about to turn 10 years old! On March 9, 2009, after losing about 50% of its value over the previous 17 months, the market started steadily ticking up. It has been a remarkable journey, with many desperate measures and hard-fought battles. Those who have ridden out the storm have seen the market increase dramatically over the last decade. 

Now, as we look to the future, let’s take stock and review some lessons we’ve learned since 2009.

  1. The worst of times are the best of times
    It’s painful to experience sharp declines in the market, but periods of market pull-backs present incredible opportunities. Unfortunately, it’s human nature to become skeptical and scared during market turn-downs. Do you remember how you felt about the market in February of 2009? Despondent? Panicked? Depressed? That would have been the best time to get excited about investing in the market, which leads to our next point.
  2. Bear markets are inevitable
    They say two things are certain in life: death and taxes. There should be a third item added to the list because it’s certain there will be another market downturn. The S&P 500 has experienced 9 bear markets in the past 70 years. That means, on average, a bear market will occur every 7.8 years. Since many of the best days in market follow some of the worst days, it’s important to maintain a disciplined investment approach, stick to your plan, and stay invested. History is sure to repeat itself; don’t forget what you have learned the next time the going gets tough.
  3. Bulls are bigger than bears
    Since 1949, the average bear market has averaged a decline of 33%. While that seems painful, it would be much worse to miss out of the average bull market’s return of 263%! Bear markets have averaged 14 months while bull markets have averaged 71 months. (see chart below) 
Cumulative price return for each bull and bear market

Without a plan in place, it’s easy to get swept away with the typical emotions of the market. It’s our privilege to help you develop, execute, and monitor a plan that will help you reach your unique goals whether the market is up or down. 

It might not feel like it outside just yet, but Spring is coming! We wish you a wonderful March.

S&P 500 Composite (Large Cap)3.21%11.48%
Russell 2000 (Small Cap)5.20%17.03%
MSCI World Ex-US2.57%9.89%
Barclays US Aggregate Bond-0.06%1.00%

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