Investors worry the bull market is getting old. But history shows it can continue to age gracefully.
Contrary to a widespread current worry among some on Wall Street, bull markets do not die of old age,
Investors are growing concerned that the current bull market is due for a correction, or worse, a bear market, simply because of its age. However, historical data suggests that this concern may be unfounded. According to past trends, bull markets can continue to thrive even as they mature.
The notion that bull markets have a limited lifespan is a common myth. In reality, the length of a bull market is not a reliable indicator of its demise. What matters more is the underlying economic fundamentals, such as corporate earnings, interest rates, and inflation. As long as these factors remain supportive, a bull market can continue to advance, even if it's been running for an extended period.
Going forward, fund investors should focus on these underlying fundamentals rather than the bull market's age. Key indicators to watch include earnings growth, GDP expansion, and central bank policies. As long as these metrics remain positive, investors can likely continue to ride the bull market's wave, even if it continues to mature.
Originally reported by marketwatch.com. FundNews adds analysis for finance & markets readers.