Stock Market: Happy Tenth Anniversary Bull Market - More Will Come

(Drivebycuriosity) - Today the bull market for US stocks celebrates the 10th anniversary. On March 9, 2009, the S&P 500 closed at 676.53. Since then, the market value has more than quadrupled. Once we include dividends, it’s up fivefold (crossingwallstreet). This bull market is fueled by a growing global economy, technological progress - especially the advance of e-commerce - and climbing company profits.

I think the bull market will see more anniversaries. Since 1928 the US stock market (S&P 500) created an average return of about 10% p.a! (dividends reinvested nyu.edu/ investopedia). So, stock market gains are the rule and dropping stock prices (including corrections & crashes) are the exception.

I claim that we are in a secular bull market that could even dwarf the stock market rally from 1982 till 2000 when the Dow Jones jumped from just 800 points to around 10,000 points. My claim is mainly based on four arguments:

1. Company profits will continue their solid growth. During the recessions of the years 2001/02 and in 2008 companies restructured and reduced costs significantly in order to survive. Now they are much fitter and more efficient than before. I believe that this learning process will continue and will translate into a long term trend of rising company profits.

2. We are experiencing a new industrial revolution.  Advances in Internet, mobile computing, 3-d-printing, robotics, nano- & biotechnology and other technologies are reducing costs, raising efficiency and creating new markets.

3. Lower taxes and less regulation in the US will also support the growth of the company earnings.

4. We are having solid tailwinds from the emerging markets which are even getting stronger. The catching-up process in China (which is still growing 6plus %), India, Indonesia and a lot of other countries translates into high growth in large parts of the global economy that creates continuously rising revenues & profits for global companies like Starbucks, IBM, Caterpillar, Apple, Microsoft, Boeing and other members of the S&P 500 (world).

To be continued