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September Financial Minute-A Milestone for the Bulls

| September 10, 2018

The final days of summer are on us.  As usual with Catherine and me, we tried to accomplish way more than we should have!  We finished our final excursion on August 14th, just in time to get back to Fork Union so she could start in-service training at Fork Union Military Academy.  

This is the start of her 18th year of being on faculty at FUMA. It is a significant event for not just that reason though.  Her tenure at FUMA began because of the attacks on the World Trade Center on September 11th, 2001. She was asked to step in as a long-term substitute for a teacher who deployed with his reserve unit to Afghanistan. So, it was not a very auspicious beginning to what has become one of our passions. Serving the Cadets of FUMA as role models, coaches and mentors.   

So, as we reflect on the changes that have occurred in our country since that horrific day, reflect that there were positive things that resulted from the tragedy; not the least of which was Catherine's opportunity to continue to serve the youth of our country. Please take a moment and remember those who sacrificed to serve each of us these past 17 years. 

While for us personally, and I am sure for some of you, August represented the end of some things and the beginning of others, it also marked a continuation of at least one event which was an important milestone for the long-running bull market. 

On August 22, the bull market, as measured by the S&P 500 Index, extended its run to 3,453 calendar days (CNBC, various sources), becoming the lengthiest bull market in history, or at least since WWII. While we may celebrate the milestone, let’s take a moment to review where we’ve come from. 

Before I go on, I believe a couple of definitions are in order.  First, a bull market is generally measured from the lowest point in a cycle to its peak. The peak can only be defined in hindsight, when the market has declined by at least 20% from its prior peak. That decline is widely considered to be a bear market–the second definition. 

That said, the S&P 500 Index bottomed on March 9, 2009 at 676.53 (data provided by St. Louis Federal Reserve).  There’s no way to sugar coat it. Late 2008 and 2009 was a bleak time for investors. Brought on by a financial crisis, the economy was sliding into a deep recession. 

Companies were quick to jettison employees, and corporate profits fell sharply. But, as we’ve seen time and time again, stocks found a bottom, a new bull market emerged, and the economy turned around.  Few could have predicted the current cycle would run as long as it has. Or, for that matter, run up as high as it has.


While not the best performing bull market, the current run has advanced 329%, as Table 1 shows below. 

Table 1: Longest Running Bull Markets Since WWII–S&P 500 Index Performance

Dates                           Trough-to-Peak Return 

Oct 1990-Mar 2000       417%

Mar 2009-present*        329%

Jun 1949-Aug 1956       262%

Aug 1982-Aug 1987       229%

Oct 1974-Oct 1980        126%

Oct 2002-Oct 2007        102% 

Source: Yahoo Finance, St. Louis Federal Reserve, S&P Capital

*as of 8.31.18 

Overcoming hurdles during this bull run 

There has been no shortage of headwinds that have temporarily interrupted the bull market or, at a minimum, created concerns over the last nine years. Financial turmoil in Europe, the U.K.’s Brexit vote, the collapse in oil prices, worries about China’s economy, and the downgrade of U.S. debt in 2011 were just some of the headwinds that surfaced to create short-term volatility. 

When headwinds have failed to throw the U.S. economy into a recession, the focus has shifted back to the positive economic fundamentals, and the bulls prevailed.  Looking longer term, the bulls have always triumphed–eventually. Those who have bet on a long-term slide in stocks have been sorely disappointed. 

If we open our history books, the Dow Jones Industrial Average was below 100 in 1915. Today, it’s above 26,000. Even if adjusted for inflation, the Dow is up over tenfold (Macrotrends). In the end, the bulls win. Why? Short downturns in the economy–recessions–are followed by economic expansions that run much longer than recessions. Over time, the economy’s value rises. It’s been that way for over 200 years. 

We recommend very diversified investment portfolios; ones that include the major sectors of the economy. Investing in a diversified portfolio is much like buying a stake in the U.S. economy.  The economy may or may not be larger next year, but history tells us it will be larger 10 or 20 years from today. Continuing along that same road, the major market averages are likely to follow a similar trajectory over a long period. 

That doesn’t mean we won’t see a sharp sell-off from time to time. It doesn’t mean that stocks will necessarily match the economy’s performance over a short period. But it does mean there is a long-term upward bias for stocks.  If you have questions or would like to talk about your investments, that’s what we’re here for. We are simply a phone call or email away. Here are how some of the key indexes are doing:  

Table 2: Key Index Returns

                                                MTD % YTD %  3-yr* %

DJIA                                         2.2       5          16.2

NASDAQ Composite              5.7       17.5     19.3

S&P 500 Index                         3          8.5       13.7

Russell 2000 Index                 4.2       13.4     14.5

MSCI World ex-USA**           -2.2      -4.3      4.3

MSCI Emerging Markets**    -2.9      -8.9      8.9

Bloomberg Barclays

US Aggregate Bond TR           0.6       -1         1.8                                   

Source: Wall Street Journal,, MarketWatch, Morningstar

MTD returns: Jul 31, 2018-Aug 31, 2018

YTD returns: Dec 29, 2017-Aug 31, 2018


**in US dollars 

Deciding is a Process Not a Destination 

This month, I want to spend some time on what types of things we should all be asking ourselves as we move closer to the end of our full-time working years.   If you want to discuss this in more details or need some additional resources, don’t hesitate to call me! 

As we begin our decision-making process about retirement there are a lot of things to consider.  First there are questions concerning where.  Some of these include: 

Do you know where you want to live when you retire? Some folks have mulled it over casually, while others have thoroughly researched it. Will you stay in your current home? Will you reduce clutter and downsize? Familiarity lends a sense of security, but downsizing may reduce your living expenses. 

Would you like to stay in the same town? Or, have you thought about retiring in a new part of the country, or outside the U.S? If so, what is important to you? What is it about that location that attracts you? Is it more hospitable weather, the cost of living, family? Do beaches, the mountains, or golf courses beckon? Are you longing for a sense of community? 

Lists abound of the best places to retire. Many have value and take the general needs of retirees in mind. However, what’s important to you must take precedence. 

Things We Should Include in Our Process 

You may have the ideal place in mind. Or, you may still be considering your options. There is plenty to dig through on the Internet. Consider the Retirement Living Information Center ( as one site that may be of assistance. 

Once we think we have a pretty good answer to the where questions we may want to ask some questions about the features we want in our retirement life.  

Do you know what things you want to have? What features are important? Do you want to rent or own? What are your options for transportation? Must you live near a major airport? What are the centers for socializing? We are social creatures. We need friends. Active adult communities may be the bridge to new people in your life. 

What about lifestyle?  Consider the simple pleasures of life. Can you walk to the store, the movies, local shops, and your favorite ice cream or coffee shop? What are the recreational options? What cultural options are available? The little things really add up. 

When you’ve narrowed down your locations, visit for at least a week or more if possible. Vacationing is one thing; relocating is another. Talk to folks who live there. Do you like the restaurants, the social climate? And what is the senior center like? Live like a local, because if you take the plunge, you will be a local! 

Ideally, visit when the weather is less than tolerable. You can’t beat vacationing in Phoenix in January, but what about July? Will you be OK with Minnesota in the winter?  More importantly, what is the access to quality health care? About 77% of older Americans have two or more chronic conditions, according to the nonprofit National Council on Aging. Can you quickly find a primary care physician who takes Medicare, or is there long wait to see a doctor? 

If you are a person of faith, attend services at the religious institution you may want to join. If your religion is an important part of your life, it should be represented in your community. If not, relocation could be problematic. 

The questions above are by no means an exhaustive list.  My goal is not to have all the questions or all the answers.  My goal is to get you thinking. How you answer these and other questions will point you in the right direction and help determine the ideal home and location for you.  But let me add one note of caution. No place is perfect. There will be trade-offs. You can compromise on the wants, but the necessities should take precedence. 

Finances will loom large in retirement. For some, we’ve been working toward your goal. For others, our team can assist with the mathematical part of the equation. We’re here to help. I stress that often. So please take advantage of us as your go-to resource. 

One question you must answer–can you trade your friends, familiar surroundings, and your favorite cultural institutions and sports teams for the unknown. Expect an adjustment period. Adventure may await, but the unfamiliar can produce stress and anxiety.  

I hope you’ve found this review to be educational and helpful. Have a great start to Autumn!