Everybody knows that the current bull market has been one for the ages. Everybody who has been long stocks for the last few years has likely enjoyed the ride. Everybody knows that the current bull market is getting old. And yet, everybody also knows that this market has some “issues.”
In response, just about everybody in the game – including yours truly – has penned a piece or three encouraging investors to exhibit some caution toward the stock market. After the two brutal bear markets that ensued once the “good times” in the markets ended in 2000 and 2008, investors can’t be blamed for being a little squeamish right about now.
Take a look at the charts below and see if you don’t start feeling a little acrophobic.
The first chart shows the S&P 500 on a weekly basis since the start of the current run for the roses. This is what a gain of 190 percent looks like.
S&P 500 – Weekly
Sure it has been a struggle at times. And yes, there have been some scary moments including the Flash Crash, the various European Debt/Greece Crises, the U.S. Debt Downgrade, the Fiscal Cliff, etc. But the key is that had investors found a way to get into stocks at just about any point from March 2009 through 2012, they would have been handsomely rewarded.
Gaining Some Perspective
Speaking of handsome rewards, take a look at the next chart below. This is a monthly chart of the S&P 500 over a 25-year period. As is readily apparent, there have been some good times.
David Moenning is the founder and chief investment strategist for StateoftheMarkets.com, a website dedicated to investor education and portfolio analysis. Mr. Moenning is also President of Heritage Capital, a privately owned, investment research firm. Heritage focuses on active risk management and an “own the best and ignore the rest” equity selection strategy.
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Positions in stocks mentioned: none
The opinions and forecasts expressed are those of David Moenning, President of Heritage Capital Management (HCM) and may not actually come to pass. Mr. Moenning’s opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security or Heritage Capital program. No part of this material is intended as an investment recommendation. Neither the information nor any opinion expressed constitutes a solicitation to purchase or sell securities or any of HCM’s programs. Do NOT ever purchase any security without doing sufficient research. There is no guarantee that investment objectives outlined will actually come to pass. Investors should consult an Investment Professional before investing in any investment program. Neither Mr. Moenning or Heritage Capital Management nor any of their employees shall have any liability for any loss sustained by anyone who has relied on the information contained herein. Mr. Moenning and employees of HCM may at times have positions in the securities referred to and may make purchases or sales of these securities while this publication is in circulation. The analysis contained is based on both technical and fundamental research. Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.