The Piton Investment Team regularly researches history to gain perspective on current movements and trends, both large and small. With the recent choppiness, and ongoing discussion of an “AI Bubble” has come conversations about the “life expectancy” of bull markets.
This graph provides important historical perspective. Although there can be claims along the lines that “this bull market has gone too far,’ history tells a different story. Since 1928, the current advance ranks only ninth in total magnitude. Many previous bull markets lasted significantly longer and generated substantially larger cumulative gains. Although, as Market Analyst likes to remind us, “The average almost never happens,” we can note that the current bull market is to date shorter, and not yet as robust in results, than the overall averages in this chart.
The lesson is that age alone does not end bull markets. Historically, they have usually ended because of recessions, tightening financial conditions, or valuation excesses—not simply because they became old. Markets can remain constructive much longer than most investors expect. This is one reason the Piton Investment Team remains open to investments in Piton portfolios that make sense in an ongoing bull market, but they will remain vigilant about individual investments to optimize results for Piton clients!