Long-term lessons from a record bull run

The US stock market recorded its longest ever bull run in August.

Standard & Poors 500 Index

A new record was set for the Standard & Poor’s 500 (S&P 500) index on 22 August 2018, when the market reached the 3,453rd day of a run that started on 9 March 2009.

The S&P 500’s current bull market saw the index increase in value by 331% since March 2009, equivalent to an annual growth rate of 16.6%, before any dividends are considered. Over the same period the UK benchmark, the FTSE 100, little more than doubled in value.

Investment strategies

The nine years of US bull markets offer investors some lessons:

  • International diversification of investment can deliver rewards. Many leading UK-listed companies are multinational, but none have matched the performance of the likes of Apple or Facebook.
  • Currency can play a part in adding to returns – or reducing them. Changes in currency valuations impact on both foreign-listed shares and UK-listed shares of companies with overseas earnings.
  • Timing entries and exits to markets can be difficult. US markets have seen a few small dips since 2009, but staying invested and ignoring the market ‘noise’ has proved to be a sensible strategy.

Almost since its start in 2009, many market watchers have predicted its demise. So far, they have all been proven wrong.

If you want to review the global spread of your investments, why not ask us to calculate a geographical breakdown of your portfolio, drilling down into each fund’s holdings?

The value of your investments and the income from them can go down as well as up and you may not get back the full amount you invested.

Past performance is not a reliable indicator of future performance.

Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.

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