1,000 Days and Counting: How Long Can the Bull Market Last?

Dow Jones Passes 17,000 For The First Time
Andrew Burton/Getty Images
One thousand days and counting.

That's how long it's been since the Standard & Poor's 500 index (^GPSC) suffered a correction. That means the S&P 500 hasn't suffered a 10 percent drop from its recent high level mark since October of 2011.

What does that mean for investors? Should they take their profits now, or does this long-running bull market have more room to maneuver?

One thousand days is a long time for the bull market to run without interruption, but it's not unprecedented, and it doesn't necessarily mean another correction is right around the corner. The bull market of the 1990s ran for 2,553 days without a correction.

"When the market does something unusual it is a good idea to be on your guard," said Hugh Johnson, chairman of the Albany, New York-based money management firm Hugh Johnson Advisors.

"For the market to have performed as well as it has without a significant correction is pretty unusual," said Johnson, "but I'm not doing anything about it."

Most analysts say the 1,000 day mark isn't significant in their fundamental analysis of the market, but they acknowledge that it is psychologically important for investors.

The current streak is double the average span without a 10 percent pullback. About one year after the current bull market began in 2009, there was 16 percent correction in 2010. The most recent correction came in 2011, when the market slumped by a steep 19.9 percent, and there was a close call in 2012 when it fell 9.9 percent.

According the Stock Trader's Almanac, the average bull market includes two periods of correction, so the current rally isn't unusual in that regard.

Many market pros and anxious investors have been anticipating another correction for quite some time, but the market has continued to plow ahead, setting record after record. So far this year, the S&P 500 has rung up 25 record highs, the latest one coming on Thursday. It went into the 3-day weekend just shy of the unprecedented 2,000 level. In addition, the Dow Jones industrial average (^DJI) topped the 17,000 mark for the first time.

That means if you invested in an S&P index fund back when the current bull run began in March of 2009 -- and not traded in and out of that position -- you would have nearly tripled your investment. But Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, says the current bull "gets no respect."

The financial media -- in print and on TV -- is filled with gloom and doom forecasts. A recent Wall Street Journal headline proclaimed "Some See Clouds Forming," while some market prognosticators warn that a market collapse is just around the corner.

They contend the market cycle has run its course, that the market is way overvalued when you examine corporate profits and other key measures, and that unrest in the Middle East, Ukraine and other hot spots could explode.

But most forecasters say that unless there is a major economic crisis (which seems very unlikely after the recent string of upbeat economic data) or a geo-political catastrophe, then the current bull market is likely to continue into next year.

Jeffrey Hirsch, editor of the Stock Trader's Almanac, studies historical trends in the market. He expects stocks to trade sideways or retreat a bit during the usual "summer doldrums" of July and August, and then resume their advance later this year and into next year. "I don't see the market rolling over until 2016," said Hirsch, noting that presidential election years "tend to be horrible."

Johnson, the veteran money manager who has helped guide investors through many bull and bear market cycles, says he is "on guard" but not worried at this point. He says the market hasn't been overrun by widespread optimism. "You don't run for cover, but you can build some defenses into your portfolio." If you're worried about a downturn, he says you can sell economically sensitive stocks like housing, and buy safer issues like utilities and household product stocks.

Many analysts even say a market correction, which is inevitable at some point, is healthy for the long term bull to continue. It gets stocks from levels that are seen as slightly overvalued back into a more fairly priced range. And as Johnson notes, that would provide for "more upside potential with better buying opportunities."

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Not much longer, besides the stock market has not been a real measure of how the economy is doing for sometime. It is manupulated and controlled and the low interest rates that benefit the stock market have run their course, now the additional 5 or 6 trillion the fed has spent to buy back the worthless debt the banks and wall street were holding, so the banks would loan money, has done nothing but put more debt on consumers and tax payers and another bubble for the economy. The government is doing away with medicare and replacing it with national health care furnished by privare insurance companies, maybe that is why our health care in this country was rated most expensive by far in the world and also rated worst for health care itself.I see politicians at all levels of government asking for a 5 to 6 percent increase in wages because of the cpi, but government is telling everybody else there is no inflation, no increase, in crime,good employment numbers and our economy is just fine, WOW

July 07 2014 at 5:34 PM Report abuse +1 rate up rate down Reply

I am amazed the market hasn't crash yet. Obama is pumping trillions in spending and printing money out of thin air. How long can this continue? Our Government owes almost seven times as much as it takes in. The published unemployment figures everyone knows is bogus. Businesses are making profits by cutting their overhead by firing People. USA corporation are paying the highest tax rate in the world. Our government promises $$$ for votes. This we all know will end and Crush ther middle class. Teach a man to fish and he will be able to eat for life. Give as man a fish and he will vote for you. Ca$h is King. Hold on to your cash as it will come back. Look for the BIG BOOM!

July 07 2014 at 8:27 AM Report abuse rate up rate down Reply
1 reply to COMMON SENSE's comment

Common sense led people to believe that the world was flat.

July 07 2014 at 10:09 AM Report abuse -2 rate up rate down Reply

It will last as long as President Obama is in office.

July 06 2014 at 9:51 PM Report abuse rate up rate down Reply

It will last only as long as the Fed keeps pumping money into it.

July 06 2014 at 6:49 PM Report abuse rate up rate down Reply

Unless food stamps replace somebody on the Dow Jones Avereage, there is no reason to be Bullish.

July 06 2014 at 4:55 PM Report abuse -1 rate up rate down Reply

When the Bulls have to go off their Fed stimulus and depend on the real sour GDP of less than 3% they all head for the slaughter house.

July 06 2014 at 10:40 AM Report abuse rate up rate down Reply
1 reply to Iselin007's comment

You have no idea what the markets going to do, other than go up and down.

July 06 2014 at 5:01 PM Report abuse +1 rate up rate down Reply
1 reply to ted_wilson7's comment

Going Down, First floor or the basement?

July 06 2014 at 11:51 PM Report abuse -1 rate up rate down

The bull will keep running with the help of the FED. When the FED stops dumping money on the banks, look for the bottom to drop out.

July 05 2014 at 1:35 PM Report abuse +8 rate up rate down Reply
1 reply to rrob.smythe's comment

The FMOC cut another $10 billion in June cutting the Fed’s monthly bond purchases to $35 billion with $15 billion going toward mortgage bonds and $20 billion toward treasuries….and the market soared…. You need to write another verse to that song.

July 06 2014 at 5:39 PM Report abuse -1 rate up rate down Reply

I'm gunna go get drunk and be somebody.

July 05 2014 at 8:59 AM Report abuse -1 rate up rate down Reply

the doubters are all the savvy guys

July 05 2014 at 5:30 AM Report abuse -2 rate up rate down Reply

keep me signed up !

July 04 2014 at 8:06 PM Report abuse rate up rate down Reply