Continue reading...As we all know, the stock market has been in a bull run for a very long time. By the time you read this, it will be the longest bull market on record.
In the nine and a half years since the final down month of the previous bear market (February 2009), the S&P 500 Index has increased by almost 300%. That makes it an average compounded annual growth rate of over 15%. Add in an annual dividend yield of around 2%, and the past decade has been a very good time for stock investors.
The current environment seems favorable to a continued boom in the stock market. Corporate earnings are at record highs and GDP growth is strong; while unemployment and inflation are both very low. It’s a Goldilocks economy again – not too hot, not too cold, just right.
Even so, we know that every economic expansion, and its associated bull market, does eventually come to an end. In hindsight it is usually easy to see what the cause of the reversal was. But in real time, it almost never is – each new bear...
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