Practical analysis for investment professionals
10 December 2013

Historical Perspective: How Today’s US Stock Market Stacks Up against Past Bull Markets

As the bull market for US stocks approaches its fifth anniversary, we are starting to see signs typically associated with the latter stages of a multi-year advance in equities. Bearish sentiment, widely seen as a contrarian indicator, has dropped to levels not seen in a generation, retail investors are returning to stocks, and the IPO market has been surging. As further evidence, in the name of innovation, Wall Street is once again rolling out risky products that are almost certain to disappoint the unwitting buyer.

For perspective, we thought it would be a good time to compare today’s market to past bull markets. Using Bloomberg pricing data for the S&P 500 Index (SPX), we identified 12 bull markets between 1932 and today. (We define a bull market as one which gains at least 20% off its bear market bottom over a period of 6 months or more.)

US Bull Markets (1932–Present)
US Bull Markets (1932–Present)

A few observations:

  • Duration — Previous bull markets ranged from 14 months (1932–1933) to 148 months (1987–2000), with an average duration of 60 months. Today’s bull market is in its 57th month, suggesting that this advance has not yet overstayed its welcome but may be in the “late innings.”
  • Gain — Previous bull markets gained between 74% (1970–1973) and 582% (1987–2000), with an average gain of 185% and a median gain of 132%. During the current bull market, the S&P 500 Index has so far gained 167%, as measured to its recent peak. This ranks as the fifth largest gain of the 12 bull markets studied.
  • Velocity — Previous bull markets advanced at different paces, ranging from an average 1.39% monthly gain (1962–1968) to a 13.1% monthly gain (1932–1933). The average monthly gain was 3.8% and the median monthly gain was 3.1%. However, the current bull market’s average monthly gain of 2.9% is on a pace that has been exceeded only twice in the past half century, during the bull markets leading up to 1987 market crash and the dot-com crash of 2000.

History shows each bull market to be different, and stock prices can be heavily influenced by factors like monetary and fiscal policy, and the behavioral idiosyncrasies of investors. Ultimately, however, prices reflect the underlying economic fundamentals of the economy and the financial performance of individual companies. As legendary value investor Ben Graham wrote in The Intelligent Investor:

Price fluctuations have only one significant meaning for the true investor. They provide him with an opportunity to buy wisely when prices fall sharply and to sell wisely when they advance a great deal. At other times he will do better if he forgets about the stock market and pays attention to . . . the operating results of his companies.

Long-term investors would do well to heed Graham’s advice.

Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.

About the Author(s)
David Larrabee, CFA

David Larrabee, CFA, was director of member and corporate products at CFA Institute and served as the subject matter expert in portfolio management and equity investments. Previously, he spent two decades in the asset management industry as a portfolio manager and analyst. He holds a BA in economics from Colgate University and an MBA in finance from Fordham University. Topical Expertise: Equity Investments · Portfolio Management

8 thoughts on “Historical Perspective: How Today’s US Stock Market Stacks Up against Past Bull Markets”

  1. P/E says:

    Nice table–question: how did you get data on SPX going back to 1932? It starts in the fifties if not mistaken. Thanks

  2. Thanks for visiting Enterprising Investor. You are correct that the S&P 500 Index was formally launched by Standard & Poor’s in March of 1957. S&P retroactively calculated its value going back to 1926, using an arbitrary average base value of 10 for the 1941-1943 period. It is my understanding that Bloomberg is using this data.

  3. Pingback: A Chilly January |
  4. Jeff Hybiak says:

    Were the returns for the historical bull markets total returns or just the price index?

  5. larrabeecfa says:


    These returns were simply the percentage change in the index.


  6. mack says:

    Question: What % of the total gains occurred in the first half of these bull markets?

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