Why This Historic Bull Market Has Precious Little Street Cred

Photograph by Spencer Platt/Getty Images

The current bull market cycle in the U.S. just sailed past the four-year mark on March 9—and the Dow Jones industrial average hit a new all-time high of 14,397 the day before. Yet stocks as an asset class continue to be viewed with suspicion, despite strong corporate profits and the housing sector recovery. Big Picture blogger and Fusion IQ Chief Executive Officer Barry Ritholtz argues the U.S. Federal Reserve’s ultra-loose money policies have created a market artificially stoked on monetary steroids. And just as individual investors have finally ventured back into the equity market, major hedge funds are starting to rotate out of stocks, betting the unprecedented government intervention propping up the market won’t last. This bull market still has serious self-esteem issues.

Yet consider this: The rally in the Standard & Poor’s 500-stock index is already the eighth-longest (1,460 days as of March 8) in history, according to financial research shop Bespoke Investment Group. If the rally manages to survive two more months, it will move into sixth place. Individual investors pulled some $150 billion out of exchange-traded funds and mutual funds from 2008 to 2012, according to mutual fund tracker Lipper. What did these investors miss? Epic returns. When it comes to performance, this bull market ranks sixth all-time. Since March 9, 2009—a day still keenly remembered in the annals of 401(k) wealth destruction—the S&P 500 has advanced 129.3 percent and is only 17 points from grabbing the No. 5 slot. That’s right, this rally may soon surpass the glorious Depression-era run in stocks from 1935 to 1937.

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