The Truth Behind The Oldest Bull Market In History

The rally that began in March 2009 is on the verge of becoming the longest ever. But are you sure about that?

- Paul J. Lim

ON AUG. 22, the bull market that sprang to life on March 9, 2009—in the aftermath of the global financial panic—will turn 3,453 days old. At that point, this bull will become the longest rally ever, surpassing the stock market’s epic run from Oct. 11, 1990, to March 24, 2000.

But there’s a huge if built into that assumption. The bull is sure to reach this milestone “only if we hit a new all-time high” between now and then, notes Sam Stovall, chief investment strategist at CFRA.

You see, on Jan. 26, the S&P 500 rose to a record level of 2,872.87. Since then, stocks have fallen more than 5%. If the market doesn’t make it back to its former peak, then it’s entirely possible that this bull market could have died at the beginning of this year. We just may not realize it yet.

Call it a foible of Wall Street. Sometimes you don’t know what type of market you’re in until you look at it in retrospect. “You have to put the celebration on hold until we find out later if the bull is in fact still alive,” says James Stack, president of InvesTech Research. “If we go down 20% from that January high, then January was the end of the bull.”

Something similar occurred after the bursting of the dotcom bubble on March 24, 2000. When stocks began to fall after hitting what was then a record high, investors initially thought it was a momentary lull in the rally. Some called it a buying opportunity. Investors didn’t realize that the bull had actually died until nearly a year later, on March 12, 2001, when the S&P 500 lost more than 20% of its value from that March 2000 peak.