Bull market: a stock market with rising costs, investor confidence and expectations of strong continued returns.
You’ve likely heard the term before, and chances are you’re probably already familiar with its definition. And according to Schaeffer’s Investment Research, the United States has been enjoying one since 2009. That’s when the Dow Jones Industrial Average initially bottomed out, beginning the market anew on a quest back to the top that’s yielded what Schaeffer’s calls an “impressive” 18% growth every single year since then.
But has the bull market continued on into 2014? The latest numbers from S&P 500 would suggest so.
According to the new data, released earlier this week, we’re more or less exactly where we’ve been the past five years at this time. However, Forbes reports that the trajectory of the market itself is a little bit different than what we’re used to seeing for the first 50 days of a new year.
Typically, the market started out enjoying great gains before dipping down in the middle of March, only to return to higher peaks throughout the rest of the year. Since January 1 of this year, it’s been a bit of the opposite. The market began quite poorly but is now seeing some impressive returns given the time of year, all of which hint at the possibility of the market experiencing even more gains as the last eight months of the year play out.
Some market watchers contend that though stocks seemed up for much of 2014, ultimately, they’re down 5% from where they’ve been in the past. But it’s hard to get the most accurate picture of the market’s trends only looking at the numbers from month to month. In order to really gauge the landscape, you have to look at a few individual stocks.
For 2013, the top 20 stocks in the first 50 days of the year went on to gains of nearly 40% for the rest of the year — and a staggering 85% of those stocks remained positive for the remaining two-thirds of the year. That made them great indicators for how the stocks were bound to perform in general. If 2014 numbers are up over this time last year, does that mean the entire year is likely to experience the same gains? The short answer is not necessarily.
But then again, you never can truly predict what the stock market is capable of.