Lessons From the Long Bull Market

What most of us missed.

John Rekenthaler 18 August, 2015 | 16:44
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Who Knew?
This has been quite the streak. Since March 2009, we've had almost nonexistent interest rates, good inflation-adjusted results from bonds, and outright terrific stock performance. If the S&P 500 remains positive at year-end, it will be the index's third-longest winning stretch since Ike was president, trailing only the bull markets of the '80s (which deserves an asterisk, as 1987 finished in the black but felt anything but) and the '90s.

Six years ago, few saw this coming. Where we collectively erred:

Don't Fight the Fed
This seems obvious. And indeed, it was obvious. After all, don't fight the Fed has been a slogan for several decades now. With short-term interest rates pushed down near zero after the 2008 market crash, forcing cash yields to follow, investors were pushed toward risky assets. As usual, they obeyed the investment math.

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John Rekenthaler  is vice president of research for Morningstar.

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