Now, three years later, we marked the third anniversary of the bull market on March 9, 2012. And it hasn’t been just another bull market. This has been the strongest bull market since WWII, with the S&P 500 Index up a little over 100% in the past three years.
- The confidence of consumers is rising. Retail sales have been posting solid gains. And, as a sign of improved confidence, consumers are beginning to borrow for the first time since the financial crisis and ensuing bear market.
- The employment picture is improving. The weekly total of first time filings for unemployment benefits has fallen to a four-year low. The U.S. continues to add approximately 200,000 private sector jobs each month, most recently in construction, health care, leisure and hospitality, and manufacturing.
- U.S. manufacturing trends are encouraging. One of the mainstays of U.S. manufacturing—the auto industry—is resurgent. Auto sales reached 15 million vehicles in February, the highest level since 2008. And U.S. vehicle production schedules look robust so far in 2012 as demand is helped by increasing access to credit and continuing consumer confidence.
These positive facts for the bull market are further supported by historical bull market performance. Six of the past seven bull markets since WWII lasted more than four years and the average return in year four of those bull markets has been a solid 12.7%.
Obviously, bull riding can be a rough, though potentially rewarding, experience. There are still areas of concern for investors– for example, high gas prices, slowing earnings growth and fiscal challenges. However, current trends and other positive U.S. economic data, all of which have been gaining momentum, could spur on the record-breaking bull market ride to a fourth year.