I wanted to quickly reach out on the four-year anniversary of the bull market, which has seen the S&P 500 climb more than 118% (WOW!). The following charts tell a strong story.
The above shows the S&P 500’s run since October 2022. Note there have been eight blips of 5% or more in these four years and the market has still more than doubled. Market timing is a losing battle so instead of thinking the next bear is coming, make sure your asset allocation is comfortable and continue to stay the course. The markets resiliency has been amazing. It has survived the pandemic, global supply-chain disruptions, rising inflation, two oil price shocks, a significant round of Fed rate hikes, soaring bond yields, a financial crisis, Trump’s tariffs, and two wars. It has also survived concerns about the market’s leadership being too concentrated in a few outperforming stocks.
The chart below shows S&P 500 price, forward earnings expectations, and price to earnings multiples. I’ve said before that stock prices follow earnings. One cannot get a much better picture of that than here. What is most comforting is that P/E multiples have contracted (the market is cheaper). Even if forward earnings slow down the market can keep increasing, admittedly, it may be at a slower rate.
Please do not hesitate to reach out with questions or concerns. We sincerely appreciate your loyalty and support.
Insights
Market Update: The Bull Market Turns Four
I wanted to quickly reach out on the four-year anniversary of the bull market, which has seen the S&P 500 climb more than 118% (WOW!). The following charts tell a strong story.
The above shows the S&P 500’s run since October 2022. Note there have been eight blips of 5% or more in these four years and the market has still more than doubled. Market timing is a losing battle so instead of thinking the next bear is coming, make sure your asset allocation is comfortable and continue to stay the course. The markets resiliency has been amazing. It has survived the pandemic, global supply-chain disruptions, rising inflation, two oil price shocks, a significant round of Fed rate hikes, soaring bond yields, a financial crisis, Trump’s tariffs, and two wars. It has also survived concerns about the market’s leadership being too concentrated in a few outperforming stocks.
The chart below shows S&P 500 price, forward earnings expectations, and price to earnings multiples. I’ve said before that stock prices follow earnings. One cannot get a much better picture of that than here. What is most comforting is that P/E multiples have contracted (the market is cheaper). Even if forward earnings slow down the market can keep increasing, admittedly, it may be at a slower rate.
Please do not hesitate to reach out with questions or concerns. We sincerely appreciate your loyalty and support.