Navigating Today’s Bull Market
The current bull market, which began on October 12, 2022, has now run for 34 months, well below the historical average of 59 months for bull markets since 1928. Although it may feel extended, the data suggests it is still relatively young compared to past cycles and has not yet delivered the triple-digit returns seen in some previous runs. Bull markets are periods characterized by rising prices and investor optimism, typically marked by gains of 20% or more. Historically, these markets must navigate a tug-of-war between positive developments, such as strong corporate earnings, solid consumer spending, and potential rate cuts, and headwinds like tariff concerns and valuation pressures. While there are no guarantees in investing, history indicates that bull markets can persist even amid uncertainty.
Seasonal Trends and “966 Days”
September has historically been the weakest month for the stock market. However, when September finishes positive, as it has this year, the fourth quarter of the S&P 500 has historically posted average gains of just over 4%, roughly triple the return seen in typical Septembers. While past performance does not guarantee future results, this seasonal trend suggests a constructive outlook for the remainder of the year. Momentum, however, has cooled somewhat. Only about 14% of stocks are currently above their 20-day highs, signaling some consolidation even as the S&P remains in an upward trend. Markets can pause for breath even in strong bull cycles before moving higher. The “966 days” headline underscores a milestone: the Russell 2000 small-cap index recently recorded its first all-time high in 966 days, the third longest gap on record. This marks a key moment in market rotation, as small-cap stocks rejoin the broader bull market. One catalyst has been lower interest expenses following a recent Federal Reserve rate cut, which typically benefits smaller companies that face less favorable credit terms than large-cap firms.
The Power of Small Caps
Many of today’s market leaders, Apple, Microsoft, Walmart, Amazon, once traded as small-cap stocks. Watching the performance of this segment offers insights into potential future leaders and acquisition targets. With small caps now showing renewed strength, investors gain another encouraging signal for market breadth heading into the fourth quarter.
Greg Powell, CIMA®
President and CEO
Wealth Consultant
Email Greg Powell here
Bobby Norman, CFP®, AIF®, CEPA®
Managing Director
Wealth Consultant
Email Bobby Norman here
Trey Booth, CFA®, AIF®
Chief Investment Officer
Wealth Consultant
Email Trey Booth here
Ty Miller, AIF®
Vice President
Wealth Consultant
Email Ty Miller here
Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
Economic forecasts set forth in this presentation may not develop as predicted.
No strategy can ensure success or protect against a loss.
Stock investing involves risk including potential loss of principal.
Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.
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