Bull Market's Five Year Anniversary. {An introduction to Seanchas}

The current bull market turned five years old back on March 6.  Back then the S&P 500 touched 666.79 before turning around and rallying almost 31% over the next five weeks.  All that did was rally us back into the support level in which we'd traded from the market's crash in October, 2008 until February, 2009.  

Of course back in March and April, 2009 there was a furious debate in financial circles as to what all of this meant.  Most of the investment world and the financial media were bearish.  Not all of course fell into this camp.  Doug Kass of Seabreeze Partners is one well known market commentator who sided with the bulls.  The late Mark Haines of CNBC famously called the bear market bottom on air five years ago yesterday.  Barry Ritholtz is another commentator that became more bullish in March.  Still if you go back and peruse the newspapers or the web from  then you'll likely find a lot more commentary skewed towards the negative than what could have been the positive outcome that we've since experienced.  That's because the financial press for the most part focuses on the here and now as that's what sells.  There's little doubt that the financial news back then was grim.  The economy was on life support and businesses were laying off employees as fast as they could churn out the pink slips.  On top of that we had a mess in the housing market that we're still digging out of today.  Investors that either held on to what they had when the market bottomed or were buyers of securities during most of that period are likely happy today with the results.  Since the March 2009 lows stocks are up about 180%.  

You could note that percentage return number is if you bought at the exact bottom.  That's technically correct but it doesn't tell the whole story about the last five years.  What if you were too scared then to buy?  What if you waited until the summer of 2009 when stocks seemed to stall out from the first stage of the advance?  Still would be up about 110%.  What if you'd bought in the weeks just before the May 2010 flash crash?  Returns of about 55%.  Summer of 2011 right before they downgraded the US debt?  Returns of between 40-50%.  That period by the way was the last real shot that you had to buy the market on a meaningful dip.  Beginning of last year?  Stocks are up over 30%.  These numbers don't include dividends which have tacked on roughly an additional 2% per year, most of the time yielding better than the 10 year US Treasury.

Now with the bull market's five year anniversary financial commentary has taken on a different tone.  If it's not exactly extremely bullish it is certainly less negative.  Stocks are also nowhere as cheap as they once were, although we would argue that they are also not overvalued.  Investors probably care less about where we've been and want to know what does any of this mean for them and  where do we go from here?  In the coming weeks we are going to begin at this blog a discussion on those two questions and a deeper dive look into our investment process.  Hopefully we can provide some insight into our process and maybe add some insight on where we may be going.  

This is going to be different than what you've seen here before in the sense of discussing how we go about addressing client's portfolios, our worldview and our investment process.  Too be frank these blog entries are going to be in essence the crib notes for some new marketing that we're going to roll out  throughout the course of the year.  You'll be the beneficiaries of that.  In keeping with our Irish theme we will call this new section Seanchas.  That's gaelic for lore, folklore, or can be loosely translated as wisdom.  Hopefully we can all learn something along the way.

*Long ETFs related to the S&P 500 in client and personal accounts.