Is It Time To Panic At The Longest Bull Run?

Is It Time To Panic At The Longest Bull Run?
Underwater by Julian Cohen. Why?

For more than 10 years, the longest bull run in history has seen stockmarkets go up, up, up, begging the question “is now the time to cash in your chips?”

Issac Newton Was Purported To Say: “What Goes Up Must Come Down”, But Does It Apply To A Bull Run?

Living With A Bull Run

A bull run is broadly defined as a market that rises over time without falling more than 20 per cent from its peak during the period.

Plenty of traders working in the markets today will only ever have known rising share prices.

In spite of tricky economic and political times during the last ten years, significant gains have been made.  Not even the current prospect of trade wars, a surging US dollar, rising interest rates and the withdrawal of quantitative easing by central banks have failed to derail the bull.

If Isaac Newton was right, how appropriate that in August 2018, the month that saw the longest bull run in history, the world also saw the first trillion dollar company… Apple!

Six Of The Longest Bull Runs

In sixth place, lasting 60 months, is the ‘Naughties’ bull run.

It began in the aftermath of the Dotcom Bubble and the 9/11 attacks.  It came to a crushing end just before the financial crisis of 2008.

In fifth place, also lasting 60 months, is the ‘Reagan Era’ bull run.

It started as inflation plummeted from over 13 per cent to about 3 per cent.  It ended on Black Monday – the largest one day market crash in history.

In fourth place, lasting 74 months, is the bull run of ‘The 70s’.

It followed the early 1970s energy crisis.  It ended with the 1979 energy crisis and the Iranian Revolution.

In third place, lasting 86 months, is the ‘Post War Boom’ bull run.

Signalled by the start of the baby boom, it ended dramatically with the Hungarian Revolution, Eisenhower’s heart attack and the launch of Sputnik.

In second place, lasting 114 months, is the ‘Great Expansion’ bull run.

Markets began to gain confidence at the start of the 1990s.  It all came crashing down at the end of the Dotcom Bubble.

In first place is the ‘Post-Crisis’ bull run.

It began after the financial crisis.  And it’s still going strong (September 2018).

How We Arrived At The Longest Bull Run In History

Here’s a short video from the Wall Street Journal which explaining how we got to where we are, and what might bring the longest bull run to an end.

Interestingly, not everyone agrees this is the longest bull run in history. 

In his informative video, John Authers of the Financial Times suggests that this isn’t, in fact, the longest bull run.  It’s a matter of how you measure it.

bull run

How To Protect Your Money When The Bull Run Ends

No-one knows for sure when the crash will happen. 

What they all seem to agree, though, is that it will.

The evidence suggests that bull runs start during terrible times, but they end during periods of euphoria.  So right now, the smart money says you should be suspicious.

The difficulty you face is that the more you search online for advice and guidance from advisers and experts as to what to do, the wider the divergence of opinions you'll find.

That divergence extends across individual investors too, as you can see from this Citywire forum thread entitled ‘When the bull run ends’.

Counting Down The Six Longest Bull Runs

bull run

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