History can tell us a lot about the future of the market.
It's no secret that we're in a new bull market. Investors have enjoyed soaring stock prices as the S&P 500 (^GSPC 1.01%) has climbed by more than 46% from its lowest point in late 2022.
But now that we're over a year-and-a-half into this bull market, some investors may be wondering just how much longer it might last. While there's no magic crystal ball to look into the future and know precisely how long we have until another downturn, it can sometimes be helpful to look at historical data.
To be clear, historical performance doesn't predict future returns. Even if there are clear trends with previous bull markets, it doesn't necessarily mean we'll see something similar now. However, history can provide a ballpark estimate of how long this bull market could potentially last.
Image source: Getty Images.
Bull markets last longer than you might think
There's good news when it comes to the average length of market downturns and upswings: Bull markets, on average, last far longer than bear markets.
According to data from investment group Bespoke, the average S&P 500 bull market since 1929 has lasted 1,011 days -- or just under three years.There were a few outliers, such as the bull markets from 1987 to 2000 (which lasted a whopping 4,494 days) and 2009 to 2020 (3,999 days). There were also five separate bull markets that each lasted under 100 days, most of which took place throughout the 1930s.
The median length of a bull market, then, was around 522 days -- or around a year-and-a-half. While that may be concerning, considering we're around 19 months into the current bull market, this doesn't necessarily mean that a downturn is right around the corner.
^SPX data by YCharts.
Of the last 10 S&P 500 bull markets dating back to 1970, half of them have lasted at least 1,000 days. All but two have gone on for longer than the median 522 days. Bull markets appear to be lasting longer as time goes on, due at least partly to the fact that economists and regulators are much better at preventing severe downturns and recessions now than they were 100 years ago.
Bear markets, on the other hand, are generally much shorter than bull markets. The average bear market lasts just 286 days, according to the Bespoke data, with the median landing at 240 days.
How to prepare for a potential bear market
Again, there's no way to know for certain whether another downturn is on the horizon. But the market can't keep surging forever, so we'll face a bear market at some point. Regardless of when exactly that may happen, you can take steps to start preparing now.
The best way to survive any downturn is to invest in stocks of healthy companies and hold them for the long term. Even if stock prices plummet, you won't technically lose any money unless you sell your investments. Quality stocks are more likely to rebound from slumps, so by simply holding your investments until the market inevitably recovers, there's a good chance you'll come out the other side unscathed.
Now is also the time to double-check that every stock in your portfolio deserves to be there. If you currently own any less-than-great stocks, now may be the best time to sell them while stock prices are still high.
Nobody can say exactly how long the current bull market will last, but if history shows us anything, it's that good economic times generally last much longer than the slumps. By investing in the right places and maintaining a long-term outlook, you can rest easier knowing your portfolio is as protected as possible.
Katie Brockman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
FAQs
Bull markets can last for a long time.
The median bull market lasts 46 months (about three times longer than the average bear market). The S&P 500's current bull run is only 21 months old.
Is now a bad time to invest in the S&P 500? ›
Also, research suggests that when it comes to the S&P 500's historical returns, there's never been a bad time to buy as long as you're a long-term investor.
Will the bull market continue in 2024? ›
As the midpoint of 2024 nears, the stock market forecast for the next six months still looks bullish, building on the same layers of support that have pepped up stocks all year. Though risks remain, the reasons for the hopeful mood stack up like tiers of a layer cake. The resilient economy serves as the base.
Is the stock market going to crash in 2024? ›
While many experts are making predictions about whether the market will crash in 2024 or how severe the next downturn will be, it's impossible to say with certainty where stock prices will be in the short term. However, the market's long-term performance is all but guaranteed to be positive.
How long will the 2024 bull run last? ›
Based on historical patterns and bitcoin's four-year halving cycles, many analysts predict the crypto market is primed for another major bull run in 2024. Quantitative models forecast the bull run could last 12-18 months and bring even greater returns than the epic 2021 rally.
How many years does a bull market last? ›
Bull markets can last for an average of 3-4 years but depend on the economic circ*mstances of the country. The average period can last for a short or long period, depending on the market conditions and several other factors.
Is the S&P 500 a good investment for 2024? ›
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.
What is the future prediction for the S&P 500? ›
S&P 500 forecast
Wall Street analysts are projecting S&P 500 companies will continue to report steady earnings growth. They forecast a 5.4% earnings growth in the third quarter and 15.7% earnings growth in the fourth quarter. Still, the S&P 500's forward price-to-earnings ratio is 20.2.
Is it time to exit the stock market? ›
Some situations when you should exit a stock include a decline in a company's fundamentals, overvaluation, finding a better investment opportunity, or requiring the money for other financial goals. You should strive to always ensure that the decision aligns with your investment strategy and financial objectives.
What is the S&P 500 forecast for 2025? ›
After reporting (year-over-year) earnings growth of 1% in 2023, what are industry analysts projecting for (year-over-year) earnings growth for the S&P 500 for 2024 and 2025? Industry analysts in aggregate predict the S&P 500 will report year-over-year earnings growth of 11.3% in 2024 and 14.4% in 2025.
Stock market forecast for the next decade
| Year | Price |
|---|
| 2027 | 6200 |
| 2028 | 6725 |
| 2029 | 7300 |
| 2030 | 8900 |
5 more rowsAug 16, 2024
Veteran investor David Roche expects a bear market in 2025, caused by smaller-than-expected rate cuts, a slowing U.S. economy and an AI bubble. Those factors could cause a bear market of minus 20% in 2025, maybe starting at the end of this year, but the Fed will have room to adjust, he added.
What is the expected return of the stock market in the next 10 years? ›
Highlights: 5.2% 10-year expected nominal return for U.S. large-cap equities; 9.9% for European equities; 9.1% for emerging-markets equities; 5.0% for U.S. aggregate bonds (as of September 2023). All return assumptions are nominal (non-inflation-adjusted).
Should I pull my money out of the stock market? ›
Key Takeaways. While holding or moving to cash might feel good mentally and help avoid short-term stock market volatility, it is unlikely to be wise over the long term. Once you cash out a stock that's dropped in price, you move from a paper loss to an actual loss.
Is the stock market ever going to recover? ›
Anthony Denier, CEO of the trading platform Webull, says he believes the stock market will ultimately post a positive return in 2024 as investors anticipate interest rate cuts by the Fed. However, he adds, we probably won't see as big of a rally as we did in 2023.
How long do crypto bull markets usually last? ›
The low conviction phase of bull cycles typically has longer and deeper corrections (-30 percent and lasting over four months), and the final exponential phase has the least severe corrections (-15 percent) that on average last just 1.5 weeks. How does the current cycle compare?
What is the long term prediction for the S&P 500? ›
Returns in the S&P 500 over the coming decade are more likely to be in the 3%-6% range, as multiples and margins are unlikely to expand, leaving sales growth, buybacks, and dividends as the main drivers of appreciation.
How long is the bull run? ›
The function of the steers, who run the route daily, is to guide the bulls to the bullring. The average speed of the herd is 24 km/h (15 mph). The length of the run is 875 meters (957 yards).
