Unloved Bull Markets

Chapter 16Conclusion

Chapter 1 concluded with a graph of the S&P 1500 Index covering the eleven-year bull market. Figure 16.1 is that same graph but extended through September 10, 2021, to now include the 2009 and 2020 bull markets. From the low, March 9, 2009, through September 2, 2021, the index gained 765.42%, meaning $1.00 would have grown to $8.65. In the early stages, $1.00 would have doubled to $2.00. Then the $2.00 would have doubled again to $4.00. Then the $4.00 would have doubled again, plus a little extra. The annualized return was 18.9% over that twelve-year and five-month period.

The ascent is so steep, it makes many of the setbacks and dips along the way appear minor. On the left side, the two European debt crises in 2010 and 2011 don't look as scary as they felt at the time. The sideways volatility of 2015 and early 2016 now appears to be a simple pause. Even the volatility event of late 2018 appears to be just an unpleasant interruption. Based on this figure, it looks like it should have been obvious and easy to invest $1.00 in early March 2009 and turn it into $8.65 in twelve years and five months. It was, as the expression goes, there for the taking. Easy money, but many investors missed it.

In earlier chapters we looked at specific situations that kept some investors out of the market. Some thought inflation was coming back and that interest rates would increase. Some thought unemployment was not dropping fast enough. Some thought stocks were expensive ...