Are we officially in a bull market?
When did the bull market start? The current bull market started in October 2022, when the S&P 500 reached its most recent low. Since then, the index has swelled about 35 percent.
With stock indexes at all-time highs, it seems we are in the midst of a new bull market. While much of the market's recent gains have come from a handful of stocks, the rally has begun to broaden in recent months. Expectations of an earnings rebound in 2024 suggest earnings could continue to drive the market higher.
For example, I have already explained that a new bull market became official when the S&P 500 hit a new record high on Jan. 19, 2024. But the bull market actually started 15 months earlier when the S&P 500 reached its bear-market low on Oct. 12, 2022.
Rather, market trackers at S&P Dow Jones Indices define a bull market as a 20% rise in the S&P 500 from its previous low. By that measure — a 20% gain off the low —the current bull market began on January 19, 2024. Note that by that measure, a bull market comes to an end when the S&P 500 falls 20% from its peak.
Key Takeaways:
The 100-minus-your-age long-term savings rule is designed to guard against investment risk in retirement. If you're 60, you should only have 40% of your retirement portfolio in stocks, with the rest in bonds, money market accounts and cash.
Because prices of securities rise and fall essentially continuously during trading, the term "bull market" is typically reserved for extended periods in which a large portion of security prices are rising. Bull markets tend to last for months or even years.
Wall Street analysts' consensus estimates predict 3.6% earnings growth and 3.5% revenue growth for S&P 500 companies in the first quarter. Analysts project full-year S&P 500 earnings growth of 11.0% in 2024, but analysts are more optimistic about some market sectors than others.
After a spectacular 2023, stocks are off to the races again in 2024. YTD, the Dow is up 2.72%, the S&P is up 7.28%, and the Nasdaq is up 6.41%. (And that's on top of last year's 13.7%, 24.2%, and 43.4% respectively.) And the outlook is for another fantastic year.
| Stock | 2024 return through March 31 |
|---|---|
| Avidity Biosciences Inc. (RNA) | 182% |
| Arcutis Biotherapeutics Inc. (ARQT) | 206.8% |
| Janux Therapeutics Inc. (JANX) | 250.9% |
| Trump Media & Technology Group Corp. (DJT) | 254.1% |
The S&P 500 generated an impressive 26.29% total return in 2023, rebounding from an 18.11% setback in 2022. Heading into 2024, investors are optimistic the same macroeconomic tailwinds that fueled the stock market's 2023 rally will propel the S&P 500 to new all-time highs in 2024.
Are we currently in a bear or bull market?
The current bull market started in October 2022, when the S&P 500 reached its most recent low. Since then, the index has swelled about 35 percent.
The Last Bull Run: A Recap
The most recent significant bull run occurred in 2020 and extended into the early months of 2021. Cryptocurrencies, notably Bitcoin and Ethereum, experienced a surge in price, reaching unprecedented all-time highs.
Over the past 50 years, there have been five bear markets, each with a duration of one month to just over two years. The current bear market started in early 2022, so we're nearing the two-year mark. The bull markets during this period have lasted from 2.5 years to almost 13 years, with three lasting over 10 years.
For years, a commonly cited rule of thumb has helped simplify asset allocation. According to this principle, individuals should hold a percentage of stocks equal to 100 minus their age. So, for a typical 60-year-old, 40% of the portfolio should be equities.
If you're 70, you should keep 30% of your portfolio in stocks. However, with Americans living longer and longer, many financial planners are now recommending that the rule should be closer to 110 or 120 minus your age.
The 120-age investment rule states that a healthy investing approach means subtracting your age from 120 and using the result as the percentage of your investment dollars in stocks and other equity investments.
Has a new bull market already begun? Some investors would say yes, with the S&P 500 Index well over the popular threshold for a bull run of a 20% gain from a trough. However, the index only recently finished recouping its bear-market losses and today sits just slightly above its January 2022 peak.
Bitcoin Halving appears to be fueling the next bull run to happen in 2024. Investing in the best altcoins can be rewarding as they offer diversification and potentially higher returns.
Selling after the bull run climax can be an opportunity to lock in profits. A bearish swing and lows that are below the bull trend line can serve as indicators that the peak has been reached. Although it would be best to sell an investment right before the climax, it's an opportunity that's easy to miss.
| Bull Market Period | Duration | Total S&P 500 Return |
|---|---|---|
| October 2002 to October 2007 | 60 months | 1.015 |
| March 2009 to February 2020 | 132 months | 4.005 |
| March 2020 to January 2022 | 21 month | 1.144 |
| October 2022 to present | 10 months | 0.248 |
Is a bull market up or down?
A bull market occurs when securities are on the rise, while a bear market occurs when securities fall for a sustained period of time.
There are several things that tend to accompany a bull market. For starters, they generally happen during periods when the economy is strong or strengthening. Bull markets are often accompanied by gross domestic product (GDP) growth and falling unemployment, and companies' profits will be on the rise.
