If it weren’t for Facebook, I’d never know my friends’ anniversaries or birthdays. Having an anniversary or birthday might be the only good thing about Facebook. Since the stock market doesn’t have a social media account, it’s up to me to tell you we have a big anniversary to celebrate.

Oct. 12 was officially the second anniversary of this bull market. I’m not describing the local cattle market (if you are curious, it has the October feeder cattle at 245). No, the bull market anniversary I’m describing is the stock market, which has been rising for two years.

It is hard to believe that the S&P 500 closed at 3,577 only two years ago (it’s at 5,800 now) when investors were nervous that the inflation rate would never slow down after the unexpectedly high wholesale inflation report. The magazine Barron’s ran an article later that day titled, “Experts Say Disaster Could Be Near. Details Are Slim.” The next day, before the market opened, a major consumer inflation report came out that showed things were dire.

Then something strange happened. The market opened and fell as expected, then about midday, stocks began to rally and ended up closing positive 2.6% on the day.

It is a good reminder for investors to take notice when stocks start to rise despite negative news because there might be more to the story. This reminds me of the famous quote by John Templeton, “Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria.” One thing we now know is that despite negative news, a bull market was born two years ago. Since then, the S&P 500 set 44 record highs to grow a total return of 62%.

It would be an understatement to say the market rally grew on skepticism. Stocks rallied during a season of unprecedented aggressive rate hikes by the Federal Reserve. Inflation wasn’t “transitory” as the Fed had predicted, 10-year bond yields jumped to 5.00%, and a war broke out in the Middle East. Everything that could go wrong was going wrong, yet the market continued to run and has for two years.

So what will happen next?

Historically, bull markets continue into a third year. Since 1950, the length of a bull market has averaged just more than five years, not counting the current bull market. I compared the annualized returns of each bull market to its length in years. Our current one is running fairly high compared to other bull markets. If this bull market continues, investors should expect positive returns but likely lower annualized returns for the remainder of this bull run.

This bull market has been impressive, especially given the political, economic and world conditions it has faced over the past two years. On a shorter term basis, I expect to see continued volatility for three reasons:

1. The market is approaching being overpriced.

2. The market often weakens just before major elections.

3. The uncertainty of a larger war in the Middle East disrupting oil supplies.

As I write this, I keep thinking that next month is my 28th wedding anniversary, and I haven’t planned anything for it. It’s not that I’m not excited about 28 years with my brown-eyed beauty; it’s just that my plan is for this to be the midpoint of our marriage.

I think we would all say the same about this bull market anniversary: We are happy about it, but mostly, we are just hoping it lasts a lot longer than this.

Have a blessed week.

Fervent Wealth Management is a financial management and services entity in Springfield, Mo. Securities and advisory services offered through LPL Financial, a registered investment advisor, Member FINRA/SIPC.

Opinions are for general information only and not intended as specific advice or recommendations. All performance cited is historical and is no guarantee of future results. All indices are unmanaged and can’t be invested in directly.

The economic forecast outlined in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

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