Should our current bull run sustain itself, it will soon be on the verge of shifting from record-setting to record-shattering.

The longest S&P bull market lasted 117 months (March 1991 – October 2000). Our current bull market, which started in March of 2009, is approaching its 107th month.

It’s little surprise that institutional soothsayers, the latest one being Morgan Stanley, are warning investors that, like Icarus, they may be flying too close to the sun.

Here’s a snapshot of what’s happening in our current market.

  • How many times the Dow hit record highs last year: 71 times; that’s like hitting highs more than once in every single week.
  •  In the S&P’s 90-year history, never had it risen in every single month of that year, except for 2017.
  • The S&P had one large pullback in 2017—a mere 2.8%; its smallest pullback in 22 years.
  •  At the start of 2018, the S&P, during its first five trading sessions, was reaching record highs every day; this hadn’t been seen since 1964.

 

So, if the market tumbles, how bad can it be? That’s what some investors are now asking themselves.

But since nobody can predict the future, we’re consigned to looking back to the past. What typically happens during the first year of a bear market?

Here’s a historical snapshot of each bear market’s year one since 1900.

To paraphrase Austrian Economist Ludwig von Mises who, in turn, echoes the Greek Pre-Socratic Heraclitus, the only thing perpetual is change itself.

The bottom line is that a major change is coming. Its exact timing and depth are, of course, unknown.

 


The risk of loss in the trading of stocks, options, futures, foreign exchanges, foreign equities, and bonds can be substantial and is not suitable for all investors. Trading on margin or the use of leverage is not suitable for all investors and losses exceeding your initial deposit is possible. Supporting documentation is available upon request. Trading futures, options on futures, and foreign exchanges involves substantial risk of loss and is not suitable for all investors. Carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources and only risk capital should be used. Opinions, market data, and recommendations are subject to change at any time. The lower the margin used the higher the leverage and therefore increases your risk. Past performance is not necessarily indicative of future results.