1 Apr 2021
Market Cycles: Bull Markets
- Posted by Dejan Pekic BCom DipFP CFP GAICD, Senior Financial Planner
‘History doesn’t repeat itself, but it does rhyme’ is a famous quote by Mark Twain.
The COVID-19 Pandemic caused a 37% collapse in asset prices last March and as a consequence marked the start of a new Bull Market.
Have a question, how long do Bull Markets last and how high do they get?
Attached is research on the duration of Bull Markets post-crash and their total return for the past 75 years.
For Australia, a Bull Market has lasted on average 46 months (or 3 years and 10 months) and the All Ordinaries has risen an average 116%.
For the United States a Bull Market has lasted on average 64 months (or 5 years and 4 months) and the S&P 500 has risen an average 172%.
Click for tables.
We are currently only 12th months into this new Bull Market and based on averages, there is a long way left to run but the problem with averages is that they cannot always be trusted.
What we can trust in is Benjamin Graham value investing principles which is not to speculate.
Instead remain invested according to your appetite for volatility and when fear and panic take hold, then react by buying more quality assets at discounted prices.
At Newealth we are always looking to support and promote our clients wherever possible and if you have any ideas or comments, please feel free to email me or to call me on +61 2 9267 2322.