The U.S. economy’s slow recovery may extend another six years, potentially doubling the duration of the bull market in equities, according to RBC Capital Markets chief U.S. market strategist Jonathan Golub.
Bull markets tend to continue until an economic cycle runs out, usually after about seven years, Golub said in an interview with Bob Moon on Bloomberg Radio. Given the pace of the current economic expansion, he said the cycle could last 12 years or longer, providing investors with reason to continue buying stocks.
“We’re going to see a lot more upside to the stock market,” Golub said. “This is going to go on for long enough that many Americans are going to be able to participate in the run higher.”
The Standard & Poor’s 500 Index has more than tripled during the current bull run, which at 76 months is the second longest in the past 60 years.
The strategist has held to bullish predictions throughout 2015, even as the S&P 500’s advance has slowed to 2.9 percent following three years of double-digit gains. He forecasts the benchmark index will end the year at 2,325, the fourth-most bullish forecast in a Bloomberg survey of 21 strategists.
The Federal Reserve is considering raising interest rates for the first time since 2006 as the economy shows signs of strengthened after years of tepid growth.
Golub said that the prospect for an increase in interest rates won’t deter equities investors, who are more likely to view higher borrowing costs as a sign of the central bank’s confidence in the strength of the economy.
“The market is actually going to rally on that as a sign of confidence,” he said. “As a matter of fact I’d love to see them start earlier solely for the reason that I think it will get this debate behind us and convince the market that we don’t need this additional boost any longer.”