Broker Check

The Permanent Bull Market

October 03, 2023

As I recently celebrated my 5th decade (plus a few more years), I look back at my life and realize that it’s been an eventful journey full of twists and turns, unexpected obstacles, and pleasant surprises. I couldn't be happier with my personal growth and progress as a husband, father, friend, son, and brother. As the years pass, my wisdom only grows. I hope my next five decades will be as good as the first five.  

This got me thinking: what about the equity markets? What have they done in my lifetime?  

Just as in my life, the sometimes scary but normal ups and downs of the equity markets have failed to derail their permanent long-term uptrend.  

A lot like life, huh? Sometimes life happens, and the plan doesn't go according to plan, but you hope for the best and keep at it anyway.  

Recently, I've read several articles where the term "a new bull market" was used to describe the equity markets since the end of 2022's bear market. I have used that term in my review meetings with clients. 

This begs the question: Have we entered into a "new bull market," or is it just an extension of a permanent lifetime bull market?  

Because when I chart out the S&P 500 since the date of my birth, it’s hard not to see a permanent bull market:

In early August 1968, the S&P 500 closed at 97.25. On my most recent birthday, it closed at 4,478 (in all fairness, that was the close as of August 4th, 2023, as my birthday was on a Sunday).  

Now, I'm no rocket scientist by any stretch. But according to my calculations, that means that the great companies of America represented by the S&P 500 Index have risen slightly over 46 times, just in the first half-century of my life! 

Mind you, this permanent bull market during my lifetime has had some panic-stricken moments: 

  • Aug 1968 – Mar 1979: For the first 10+ years of my existence, the S&P 500 Index spun its wheels and did nothing. How discouraging. Imagine abandoning all hope at that point. 

Here is what it looked like:

It’s not as if investors didn’t have reasons for the equity markets to be flat for the decade:

The only problem with that narrative of the great American companies flailing for ten years is (as measured by the S&P 500) that they increased their dividends to shareholders by 96% and their profits by a whopping 154% during those ten so-called "dead” years.  

  • May 2000 – Oct 2002 & Oct 2007 – Mar 2009: I would see TWICE in my lifetime (two times in one decade no less) the equity markets being halved:

Like there wasn’t anything happening that contributed to those epic beatdowns (Yeah right!)-

Once again, the end of the world was delayed, and American companies didn't waste time focusing on the equity markets. Instead, they kept innovating, changing, adapting, and finding ways to provide value to their shareholders. 

The S&P 500 Index saw dividends increase by 40% during two 50% declines despite a challenging environment for corporate profits, which saw earnings hardly grow. Meanwhile, as measured by CPI, inflation was up around 27%, yet again proving that equity ownership can be a steadfast hedge against inflation.  

My investing lifetime has been fraught with reasons NOT TO invest. Yet, all American companies have persevered to become more profitable, with stronger balance sheets than at any other time in history. 

And that is something that you’ll NEVER hear in the media. 

Want to look at your lifetime of investing? Reach out, and we would be more than happy to send you your lifetime chart! 

Stay the course, my friends!