a statue of a bull on a brick street by Harri P courtesy of Unsplash.

Will This Bull Market Continue into 2025? What Past Bull Markets Tell Us

Ryan Page |

Will This Bull Market Continue into 2025? What Past Bull Markets Tell Us 

As I’m sure you’ve noticed, the U.S. stock market has been in high gear for over 2 years now; with 2023 returning well into the double digits, and this year looking to do the same, with only about two weeks left in the year. 

So, if you’re an investor (and hopefully you are) you may want to know: what’s the likelihood this will continue through next year? 

Of course, no one has that highly sought after crystal ball and past performance never guarantees future results; but looking into the past can often uncover insights and patterns that may give us a reasonable idea about what could occur going forward. 

 

A Look at Historical Bull Markets

Looking back nearly 100 years, bull markets have lasted, on average, about 6 years. In other words, it has been unusual for stock market growth to only last a couple years. In fact, there hasn’t been a bull market that didn’t stretch into at least a 3rd year since the mid-1970’s.  

Strictly from that perspective, it would be reasonable to estimate further growth heading into 2025. But of course, we want to take a closer look under the hood. What do the economic fundamentals tell us? 

Earnings:  U.S. corporate profits rose 3.5% in Quarter 2 and have remained steady in Quarter 3. Compared to this time period last year, they have risen by 6.4%.  Every indication thus far is for further growth in Quarter 4. [1]  

Consumer Spending: Americans are still spending at a high clip, with overall consumer spending reaching an all time high in Quarter 3 of this year.  When we spend, companies profit, and profitable companies generally translates to stock price growth. 

Unemployment & Wage growth: Unemployment remains low at 4.2%, and wage growth is staying strong with a 5.6% increase since last year. 2 3

 

Other tailwinds include what is likely to be the continuation of the tax cuts enacted in 2018, as well as a more deregulated environment – generally favorable for business. 

What should we keep an eye on?  Inflation. Although it has improved dramatically since 2022, it’s still not where the Fed wants it to be and if it ticks back up, this could cause a pause in rate cuts.  Geopolitical stability is another concern, as multiple conflicts across the globe remain.   

 

Bottom Line: 

Bull markets don’t last forever, and neither will this one.  However, they can and do often run longer than expected, particularly with strong economic fundamentals as their foundation.  As we approach 2025, staying informed and focusing on your financial goals is more important than ever.

Investors should continue to focus on diversification and maintain a long-term perspective.  Trying to time when this bull market will end could be a costly endeavor. As always, time in the market is what builds wealth, not timing the market. 

 

Do you have a professional in your corner who is staying on top of domestic and global markets and economies? If not, and you would like to discuss your portfolio and financial plan, please feel free to message us using the template at the bottom of this page.  I or someone on our team will reach out to you directly. 

Ryan Page 

 

Sources: 

  1. https://tradingeconomics.com/united-states/corporate-profits#:~:text=Corporate%20profits%20in%20the%20United%20States%20rose%20by%203.5%25%20from,revised%202.1%25%20drop%20in%20Q1.
  2. https://tradingeconomics.com/country-list/unemployment-rate?continent=america
  3. https://tradingeconomics.com/united-states/wage-growth#:~:text=Wages%20in%20the%20United%20States,percent%20in%20April%20of%202020.

 

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.