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‘Fear’ Boosting Best Bull Market Ever to 468% Gains — And Beyond

‘Fear’ Boosting Best Bull Market Ever to 468% Gains — And Beyond

The stock market is still rocking through its record-long expansion that started in March 2009, and now it’s apparently the best bull market run since at least World War II as indexes continue to hit new highs.

The current bull market has astounded investors with 468% returns for the S&P 500 when looking at data from March 9, 2009, to the Nov. 1, 2019, according to The Leuthold Group. It’s the best run since World War II, and if you factor in the first two weeks of this month, that number actually jumps up to 471%.

The second-best bull market in recent history was a little shorter than the current run, lasting from 1949 to 1956, but it was just as explosive with 454% gains. The 1990s run came in hot with 391% gains, and rounding out the Top 4 was the run in the mid-’80s that logged a 305% boost.

Optimism surrounding the trade war between the United States and China has been the main force behind the recent push higher as the S&P 500 hit a new high of 3,094, Wednesday. While the market has hit some potholes regarding negotiations between the world’s two largest economies in the last few months, Leuthold Chief Investment Strategist Jim Paulsen argues “fear” is what is sustaining the current run.

“The most outstanding feature of this cycle since 2008 is always going to be fear,” market perma-bull Paulsen said, according to CNBC. “I’ve referred to this cycle to some degree as a bearish bull market. It keeps the market from getting so far over its skis that it has to have a bear market.”

Back in September Paulsen predicted traders would flock to the stock market heading into the holiday season, and so far that seems to be the case.

And he thinks uncertainties like the trade war have led the Federal Reserve to cut rates three times this year, which has only helped the market go higher.

“It also keeps a lot of dry powder on the sidelines as a cushion under the market, and for fuel to push it higher,” Paulsen said. “It makes policy officials bring in stimulus because they think the recovery is going to end.”

President Donald Trump is loving it, too. And he has reason to as the S&P 500 has soared 35% since his inauguration in 2017. He praised the new market highs in a tweet Thursday.

Paulsen also credited weakness around the world as another driving force behind the bull market.

“The other thing that’s helped the bull is how poorly the rest of the world’s done,” he said. “It sort of kept everyone here. If they are going to buy anything at all, they’d buy U.S.”

Editor’s note: Are you riding the bull and if so, how far are you willing to go before pulling back? Share your thoughts below.