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How to handle the longest bull market ever

We entered new territory last week. Stocks are on an epic run, and we are now in the longest bull market on record, by most definitions.

Buoyed by corporate tax cuts, low interest rates, stock buyback programs, and a strong tech sector, the economy has seen solid economic and corporate earnings growth.

While merely hitting this historic milestone may make some folks jumpy, Marc Chaikin, CEO of Chaikin Analytics sees the good times continuing. He is quoted by CNBC as saying, “We have an economy that is not overheated and rates are still low. Couple that with the fact that people keep finding reasons to hate this market, that is a perfect storm for more gains.”

Our Take 

The market is doing well, despite the volatility this year. And yes, this has been the longest bull market.

It has also been the longest recovery from a recession. If you look at the valuations of the S&P 500 companies based on what they expect to earn over the next 12 months, the result is right near the historical average over the last 30 years. 

The overall U.S. economy is strong, allowing companies to earn more and justify higher valuations. The fear of tariffs and trade wars is still front-page news but the negative impact is being felt much more in international stock markets than the U.S. stock market. 

There are some sectors and specific companies that are probably a little over-valued at this point. If you are selective, there are plenty of companies to invest in out there that are fairly valued and have good growth potential. 

If you’d like to take a deeper dive into selective stock purchasing, set up a consultation with your Wambolt advisor.

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