The longest bull market in history may have ended on September 20, 2018. However, we cannot officially say that yet. The end of a bull market is characterized by a 20% drop from the peak. The S&P 500 was two points away from 2,344.6 on December 27th before staging its end-of-year rally, the level that would indicate an official end to the bull market. The Dow Jones Industrial Average will need to drop below 21,561.45 to signal the official bull market end for that index.<\/p>\n
The bull market narrowly escaped a 20% drop in 2011 over debt ceiling debates in U.S. government. In that year, however, the market ended up for the year. Since March 9, 2009, the only year the S&P 500 has ended down was 2015. And that year it fell a slight 0.07%. We\u2019ve come a long way from the March 9, 2009, low of 676 on the S&P 500.<\/p>\n
Needless to say, the fourth quarter of 2018 had many investors on edge. The S&P 500 index, an index of the largest 500 U.S. stocks, ended the quarter down 13.5%. Several factors led to this decline including:<\/p>\n
\u2022 Fears of a global slowdown in growth,
\n\u2022 Increasing interest rates, and
\n\u2022 Political uncertainty.<\/p>\n
Notably, bonds did their job in the fourth quarter. While stocks fell, the broad aggregate bond index rose 1.6%. Investors fled to typical safe havens such as bonds, gold and the U.S. dollar. Defensive sectors such as utilities, consumer staples and real estate held up better than growth-oriented stocks such as technology.<\/p>\n
Fourth quarter volatility offered significant opportunity for trading. The rise and fall of prices were sharp and pronounced. These sharp movements provide good exit and entry points for repositioning of portfolios while adjusting risk at relative high and low points. We placed opportunistic trades during the quarter, which helped protect downside performance versus stock indices for the full quarter. Up until this time, opportunities for trading had been few and far between with little variation as the market moved upward in a steady pattern.<\/p>\n
The fourth quarter may be a harbinger for volatility to come in 2019. Slowing earnings growth due to the loss of corporate tax benefits, higher interest rates and political uncertainly may continue to drag down the market. However, there\u2019s much to be positive about going into 2019:<\/p>\n
\u2022 Low unemployment,
\n\u2022 Rising wages, and
\n\u2022 Continued technological advances<\/p>\n","protected":false},"excerpt":{"rendered":"
The longest bull market in history may have ended on September 20, 2018. However, we cannot officially say that yet. The end of a bull market is characterized by a 20% drop from the peak. The S&P 500 was two points away from 2,344.6 on December 27th before staging its end-of-year rally, the level that […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[119,123],"tags":[],"class_list":["post-6257","post","type-post","status-publish","format-standard","hentry","category-market-commentary","category-market-performance"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p7kXxe-1CV","jetpack-related-posts":[{"id":6509,"url":"https:\/\/schenkelberg.investments\/?p=6509","url_meta":{"origin":6257,"position":0},"title":"Financial Planning During a Volatile Market","author":"J.J. Schenkelberg, CFA","date":"April 3, 2020","format":false,"excerpt":"Anxiety has been high for all individuals across the globe. We are all worried about our health, the health of loved ones, the care of important health care workers and other individuals on the front lines. Not to mention the immediate scarcity of some grocery products (many may never stock\u2026","rel":"","context":"In "Financial Planning"","block_context":{"text":"Financial Planning","link":"https:\/\/schenkelberg.investments\/?cat=122"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/schenkelberg.investments\/wp-content\/uploads\/2020\/04\/image.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/schenkelberg.investments\/wp-content\/uploads\/2020\/04\/image.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/schenkelberg.investments\/wp-content\/uploads\/2020\/04\/image.png?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":6513,"url":"https:\/\/schenkelberg.investments\/?p=6513","url_meta":{"origin":6257,"position":1},"title":"The Market’s Crystal Ball","author":"J.J. Schenkelberg, CFA","date":"April 3, 2020","format":false,"excerpt":"I hope this newsletter finds you well. It is amazing how the world can change in just a few months. The recent environment helps us remember what is most important in life\u2014family, friends and health. A big thank you to my clients! It is a privilege to help you navigate\u2026","rel":"","context":"In "Market Commentary"","block_context":{"text":"Market Commentary","link":"https:\/\/schenkelberg.investments\/?cat=119"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/schenkelberg.investments\/wp-content\/uploads\/2020\/04\/image-2.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/schenkelberg.investments\/wp-content\/uploads\/2020\/04\/image-2.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/schenkelberg.investments\/wp-content\/uploads\/2020\/04\/image-2.png?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":6194,"url":"https:\/\/schenkelberg.investments\/?p=6194","url_meta":{"origin":6257,"position":2},"title":"Market Update 1Q 2018 – Uncertainty and Change","author":"J.J. Schenkelberg, CFA","date":"April 6, 2018","format":false,"excerpt":"In the last newsletter I stated that \u201cchange may be afoot.\u201d The first quarter was certainly driven by change. The Standard and Poor\u2019s 500 Index, an index of the 500 largest United States public stocks, fell 0.8% for the quarter\uf0bethe first negative quarter since second quarter 2015. In 2015, first\u2026","rel":"","context":"In "Market Commentary"","block_context":{"text":"Market Commentary","link":"https:\/\/schenkelberg.investments\/?cat=119"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":6744,"url":"https:\/\/schenkelberg.investments\/?p=6744","url_meta":{"origin":6257,"position":3},"title":"Buy Low Sell High. Can A High Represent A Low?","author":"J.J. Schenkelberg, CFA","date":"April 3, 2024","format":false,"excerpt":"A key investment mantra is \u201cbuy low sell high.\u201d Based on this key mantra, it is best to buy investments at low prices in order to sell them at higher prices. This is a quality investment strategy for generating positive returns. The Standard and Poor\u2019s 500 Index (S&P 500) closed\u2026","rel":"","context":"In "Market Commentary"","block_context":{"text":"Market Commentary","link":"https:\/\/schenkelberg.investments\/?cat=119"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/schenkelberg.investments\/wp-content\/uploads\/2024\/04\/image-2.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/schenkelberg.investments\/wp-content\/uploads\/2024\/04\/image-2.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/schenkelberg.investments\/wp-content\/uploads\/2024\/04\/image-2.png?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/schenkelberg.investments\/wp-content\/uploads\/2024\/04\/image-2.png?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":6917,"url":"https:\/\/schenkelberg.investments\/?p=6917","url_meta":{"origin":6257,"position":4},"title":"Annual Trends \u2013 How Far Can We Go?","author":"J.J. 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