Timely and Relevant News: We've Come a Long Way

Approximately one year ago on March 16th was one of the worst days in the history for the stock market - with the Dow losing 12.9%.

Stock market volatility can distract investors from long-term goals. Many investors panicked and sold around this time last year, only to see stocks soar higher, while bonds struggled and cash didn’t do anything. This past year demonstrated the importance and value of working with a trusted financial advisor who will help guide you during volatile times.

The current bull market celebrates its one-year anniversary today from the March 23, 2020 lows. There is a lot of thought and reflection on how far we’ve come and where we could be going. The bottom line is the economy is recovering at a record pace and stocks are at all-time highs.

So what happens next is the logical question? History tells us that previous bull markets have not been lower during the second year of their existence. While volatility may occur, remember that history is on the bull's side and continued gains are likely.

As shown in the chart below, the previous six bull markets since World War II all saw gains during their second year. The average bull market was up 43% one year in and up to 61% two years off the lows. It is worth noting that the current bull market is up close to 75%, making it the strongest start to a new bull market and beating the start to the 2009 bull market.

Our confidence in the economic recovery continues to grow, bolstered by vaccine distribution, and fiscal and monetary stimulus. So while a pickup in volatility would be normal at this stage of a strong bull market, we think suitable investors may want to consider "buy the dip" opportunities as they arise.

If you have specific questions or would like to discuss your own investment strategy or financial planning needs, we welcome you to call us at 302.234.5655 or email us at contactus@covenantwealthstrategies.com to set up time to discuss further. 


This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities. All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

All index and market data from FactSet and MarketWatch. This Research material was prepared by LPL Financial, LLC.