The Roaring 2020s are Prodding the Bull

The Roaring 2020s have been very good so far, but not exceptional when examined in isolation, but -- when viewed in the context of the past 16 years -- this longest bull market is spectacular. Recency bias leads to believe there will be more of the same. History suggests otherwise; expensive markets tend to become less expensive.?

The Roaring 2020s

US stocks and gold have led the Roaring 2020s asset classes.

?Inflation fears are a reasonable explanation for both stocks and gold leading in performance.

Multi-asset portfolios, as measured by target date funds, have fared very well, earning 9% per year for aggressive approaches and 5% for conservative.

The 2020s are in fact roaring, but not that exceptional relative to other 5-year periods, as shown in the following.

But a more enlightening perspective is revealed by looking further back to the beginning of the recovery from the 2008 financial crisis.

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Prodding the bull

Coming into this decade, the stock market had been growing by an above-average 13% per year for 11 years – that’s a whopping? 272% cumulative return. But then the 2020s prodded the bull with an even higher 14.3% per year annual return – adding another 96% compounded.

Consequently, this longest 16-year bull market has earned 630%. Feel wealthier? You should. It’s been an amazing and unprecedented 16 years.

?Conclusion

Books on smart gambling recommend a betting strategy that takes some of your wins off the table. If you leave them all in, the house will eventually wipe you out because its resources far exceed yours. The related saying is that “There’s room for the bulls and the bears but not the hogs.” Enjoy your wins; keep them.

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