At the close of trading in New York today, the stock market will make an impressive milestone. It will set the record for the longest bull market in history.
A bull market generally begins when the market rises 20% from the low set at the end of a bear market, which itself is measured by a 20% fall from a previous peak. (There are other ways to measure all this, and other records that can be argued over.) The last low set by the benchmark S&P 500 index was on March 9, 2009. It’s been 3,453 days of fairly steady growth since then, with the S&P 500 climbing by more than 320% over that period. The previous record bull run was set between Oct. 1990 and March 2000.
This is another sign that the current economic recovery is getting long in the tooth. And though it’s said recoveries don’t die of old age, many people are convinced the end of the cycle is rapidly approaching. A long run of loose central bank policies following the financial crisis has helped stretch out this bull market, making stocks more attractive than low-yielding bonds and giving companies leeway to borrow freely. Recently, corporate tax cuts have added another boost to corporate balance sheets.
The single biggest contributor to the current bull run has been Apple, which recently hit its own milestone of becoming the first US public company valued at more than $1 trillion. Meanwhile, the company whose share price gained the most during this bull market has been Abiomed, which makes medical implant devices. Its stock has climbed a heady 6,900% since March 2009.
This bull run has struggled to survive at times. In August 2015, global stocks suffered a rout that threatened to end the bull market. A selloff that started in Chinese stocks ultimately wiped off more than $5 trillion in global stock value in just a few days. In February of this year, the S&P 500 dropped by more than 10% and stocks had their most volatile quarter since 2011.
Given these setbacks, this bull run hasn’t been the strongest in history, even if it is now the longest. It has recorded the third-largest total return of bull markets going back to the 1930s, according to data from S&P Dow Jones Indices. On an annualized basis, the returns have been particularly weak, at only 16.5% per year, making it 10th out of 13 bull markets. By comparison, the 1990-2000 market produced an annualized return of 19%. The strongest on that measure ran from June 1932 to March 1937, which returned just under 36% on an annual basis.
What does today’s record-setting milestone mean to most people? Probably not a lot. Research published earlier this year by an economist at New York University found that more than 80% of all stocks owned by Americans are held by the wealthiest 10% of households. Almost half of US households have absolutely nothing invested in stocks, not even through their retirement savings.