Historic Stock Rally Favors Bears More Than Bulls
Earnings volatility and lofty valuations argue against long-term hefty returns.
Don’t sleep on the guy on the left.
Photographer: Krisztian Bocsi/Bloomberg
After a harrowing end to 2018, U.S. stocks have staged a fierce comeback. The S&P 500 Index notched a record high on Friday and extended its advance on Monday. It is up 25 percent from its Christmas Eve nadir, placing the 85-day advance among the top 2 percent strongest rallies since 1928. Predictably, bulls and bears are already arguing about the market’s next move.
The debate may be entertaining, but it’s also beside the point. For many investors, whose time in the market numbers in years rather than months, the more useful question is how stocks will fare over the longer term, and the most likely answer is not well.