THE CURRENT BULL MARKET IS the longest in history, but it has had some scrapes along the way. Some, such as the August 2015 “flash crash” in exchange-traded funds, were mere flesh wounds. Others, such as the late-2018 sell-off driven by concerns over rising interest rates and a U.S. trade war with China, drew serious blood. Standard & Poor’s 500-stock index slid 19.3%—just a hair above bear-market territory (generally defined as a 20% decline from a market’s peak).
“If it bleeds, we can kill it,” Arnold Schwarzenegger once noted. Okay, that’s not accepted Wall Street wisdom, it's a line from the movie Predator, but the point stands. The bull market is mortal. Just because it has survived every challenge to date doesn’t mean that investors shouldn’t keep an eye on where things stand compared with conditions that have led to the demise of bulls past. Overall, the bull doesn’t appear to be in immediate danger, but the following factors are worth watching.
THE ECONOMY
“Bull markets don’t die of old age. They die from fright,” says Sam Stovall, chief investment strategist at research firm CFRA. What investors fear is recession—a prolonged period of negative economic growth. About two-thirds of bear markets occur alongside recessions, with the market peak tending to precede the recession by six to nine months. Because consumer spending accounts for some 70% of U.S. economic growth, negative trends for consumers signal trouble, says Stovall. Consumer confidence tends to post year-over-year declines in the run-up to recession; housing starts have logged a double-digit decline from the previous year’s levels within three months of every recession since 1960.
Esta historia es de la edición April 2020 de Kiplinger's Personal Finance.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor ? Conectar
Esta historia es de la edición April 2020 de Kiplinger's Personal Finance.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor? Conectar
My Top 30 Index: An Update
A year ago, I put together what I called \"my own reinvention\" of the Dow Jones industrial average, the popular 142-year-old large-cap index.
Balance Your Risk and Reward
These new ETFs let you cut stock market losses. But you'll sacrifice some gains.
IS A HYBRID CAR RIGHT FOR YOU?
Hybrids offer a fuel-saving option for drivers who have reservations about all-electric vehicles. But there are trade-offs.
HOW TO REACH YOUR INVESTING GOALS
Patience helped these four investors make their portfolios work for them.
WHERE TO INVEST NOW
Expect a lot of midyear churn, with a rally toward the end of 2024.
TIPS FOR FINANCING A HOME PROJECT
I recently had a call with a client who was looking to fund the construction of a swimming pool at his house.
MORE WOMEN THAN EVER ARE STARTING BUSINESSES
Retail and travel businesses, along with health, beauty and fitness, are popular with women entrepreneurs.
Finding Home Health Care
It’s important to hire a caregiver you trust.
UNDERSTANDING BOND FUND YIELDS
What's a 30-day SEC yield? A trailing 12-month yield? A yield to maturity? We explain what each measure says about an income fund.
ANSWERS TO YOUR QUESTIONS ON STUDENT LOANS
If you have federal student loans, you may benefit from new government policies. Here's what you need to know.