Global investment manager, Eaton Vance, has noted that this month has marked one of the longest bull markets for US stocks in history.
Although the bull market has been one of the longest, lasting 113 months, it has not been the strongest, with the S&P 500 appreciating 411 per cent from 2009 to August 2018 or 18.9 per cent per year.
However, the record set by the market was in the 1990s when it returned 21.6 per cent per annum during its run.
According to Eaton Vance, the current expansion was in its ninth year, which was the third-longest of the post-war period.
“Historically, leading economic indicators such as consumer confidence, homebuilder sentiment, jobless claims and high-yield credit spreads deteriorate before recessions, but we see no evidence of that at this time,” Eaton Vance portfolio manager, Yana Barton, and director of growth equity, Lewis Piantedosi, said.
“Furthermore, the US consumer, the primary engine of the US economy, remains healthy, buoyed by fiscal stimulus, strong employment and wage growth.”
Additionally, they believed the environment for active stock investors remained favourable and historically low interest rates were supportive of further economic growth, with some central banks such as the Federal Reserve moving to a tightening stance.
Overall, the monetary policy remained accommodative or neutral at worst, they said.
“There are winners and losers in any market, and we believe investors focused on fundamentals should continue to be rewarded. We continue to be selective in stocks of companies we believe should benefit from long-term secular tailwinds and excel irrespective of the market ‘inning’ we are in.”
