There was never a bull market quite like the past ten years. We talk a little about returns and what we have to look forward to now.

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Episode 035 – End of A Bull Market

Episode 035 – End of a Bull Market.mp4

Rick:                 Welcome to Market Insights from Southwest Investments. I’m your host, Rick Zich. Joining me today is going to be Bart Schannep. What we’re going to be talking about today is recapping this spectacular bull run that ended with the COVID-19 pandemic.

People tend to follow either the Dow Jones or the S&P, Standard and Poor’s index. We’re going to be discussing specifically the returns of the S&P 500 and recapping this most recent bull market and its dramatic run that it’s had. Bart, why don’t you get us into some of those details?


Bart:                 Thank you, Rick. Yes, I don’t think we need to play the dirge just yet, but we certainly did see the end of a spectacular bull market, the bull market that began on March 10th 2009. Now, as a formal definition, a bull market starts at the lowest point of the previous bear market. That’s the beginning of the up.

In other words, if the market is digging itself in a hole, that’s when the market stops digging the hole. From then, since March 10th 2009 until this COVID-19 virus hit, and in this case the market topped out on February 19th 2020, so just shy of 11 years. The S&P 500 as the broadest base U.S. market index had a total gain of 529 percent or 18.3 percent annual compounded rate of return, which is a terrific bull market.

We are now in a bear market. We’ll see how long this lasts. We hope we’ve already seen the bottom, but we’ll see. If we have, that’s the start of the next bull market. What’s important is being in the market. Had you joined or had you invested six months after the bottom when maybe you felt better about things, your average annualized rate of return will have dropped to 14.4 percent.

Had you been early by six months, your return would have been reduced to 11.6 percent average annualized rate of return. These calculations are all based on a company called BTN the Research. Nobody has perfect vision. Nobody knows when the bottom is, but it’s a good lesson on being in the market, making sure you’re in the market.

Unfortunately, what that frequently means is going against our better interest and buying when things are scary, or more specifically, when things are the most scary. That’s my tidbit for today, my statistics for today. Thank you.


Rick:                 Well, thanks so much, Bart. It is very interesting. Number one, certainly that was a very good run for us all. Many investors really ask about the long-term average, and for some reason 12 percent is kind of stuck in their head for that number.

While it’s stuck in their head for that number, over the past few years, we had almost 11 years providing 18 percent interest. I mean, not interest but 18 percent returns per year as an average annualized rate of return. That’s just very, very hard to come by. That’s why this bull market is rather extraordinary.

Let’s obviously hope for more like it. We don’t know what this is going to be taking us into with the COVID-19. This is an interesting time, and I really look forward to seeing what’s going to be happening. Thank you Bart for sharing that insight.

Thank you all for coming and watching our show again, joining us on the webcast. If you do have any questions, again, please feel free to fill out our ‘contact us’ form. Hopefully I will be able to read some of those on our webcast  in the future. We just look forward to that input. Thanks so much for joining us again. We look forward to seeing you next time.v