
By Noah Solomon
Special to Financial Independence Hub
Yes, I’m stuck in the middle with you
And I’m wondering what it is I should do
It’s so hard to keep this smile from my face
Losing control, yeah, I’m all over the place
Clowns to the left of me, Jokers to the right
Here I am, stuck in the middle with you
- Stuck in the Middle With You, by Stealers Wheel
Caught between the Rock of FOMO and the Fear of FOL
With the current bull market now into its fourth year and many global stock indices at or near record levels, investors could be forgiven for wondering how much upside there can be from here and when the party will end.
While almost nobody with whom I have spoken believes that a bear market is imminent, they are concerned that it is becoming more likely. Despite this increased wariness, people are also cognizant that running for the hills could entail foregoing considerable gains should markets continue their trajectory. They are trapped between the “rock” of FOMO (fear of missing out) and the “hard place” of FOL (fear of losses). Buffett best described this recurring dilemma in his statement:
“The line separating investment and speculation, which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs. Nothing sedates rationality like large doses of effortless money. After a heady experience of that kind, normally sensible people drift into behavior akin to that of Cinderella at the ball. They know that overstaying the festivities — that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future — will eventually bring on pumpkins and mice. But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There’s a problem, though: They are dancing in a room in which the clocks have no hands.”
This month, I discuss whether the current bull market has reached a stage where it is something to be feared. To this end, I will ascertain whether it represents an outlier from a historical perspective with respect to its longevity, magnitude, and valuation. I will also discuss the catalysts that have brought an end to previous bull markets and whether any such “markers” are lurking in the shadows.
It’s not a Question of IF, but WHEN
As the following table illustrates, bear markets have hardly been uncommon.

I have no idea when the next bear market will arrive or how severe it will be. For what it’s worth, I don’t think anybody else does either. However, unless you believe that bear markets have become extinct, markets will continue to suffer periodic episodes of malaise. As the saying goes, “You don’t need to know when something will happen to know that it will.”
Looking for the Signs: Mapping the Present to the Past
From a purely statistical perspective, some measures suggest that the current bull market may have considerable life remaining. However, there are also some signs that have portended the demise of its predecessors.

In terms of length, the current runup in equities does not appear long in the tooth. As of the end of last month [June], it has been 1357 days since the end of 2022’s bear market in mid-October of 2022. By contrast, the average duration of bull markets since WWII has been 1905 days.
With respect to returns, the present bull market appears similarly unalarming, with the S&P 500 Index producing a total return of 123.2%, as compared to an average return of 177.4% for all previous bull markets in the postwar era. However, this average is heavily skewed by the bull run that included the late 1990s tech bubble, during which the index produced a total return of 582.1%. Once this extreme data point is removed, the average bull market return falls from 177.4% to a far more modest 140.6% that makes the current bull market appear considerably less youthful.
From a rate-of-appreciation perspective, the current bull run appears somewhat ahead of itself. In its 1357 days of existence, the S&P 500 Index has delivered a total return of 123.2%, as compared to an average return of 104.8% over the same period during the three previous bull markets. Only the post-global-financial-crisis bull run had a greater rate of ascendance, returning 125.4% over its initial 1357 days. However, when equities troughed in March 2009, the forward P/E ratio of the S&P 500 was approximately 11. Once investors became comfortable that the world was not collapsing, bargain basement prices and hyper-stimulative monetary policies served as rocket fuel for stock prices. In contrast, the current bull run began with a P/E ratio of over 16 and current rates are particularly accommodative, which makes this bull market’s pace of gains appear somewhat anomalous.
Perhaps the most striking feature of the U.S. market is its strength over an extended period. With the exception of the short-lived Covid Crash and the relatively shallow and short bear market of 2022, markets have been on a largely uninterrupted winning streak. Annualized returns over the past 10 years through the end of 2025 are 14.68%, as compared to an average of 10.97% for all rolling 10-year periods in the postwar era. In a worst-case scenario, reversion to the long-term mean would require a 44% decline, while a more benign path would necessitate subpar returns over an extended period.
Lots of Steak. But also, some Sizzle
Don’t get me wrong: if earnings growth had kept pace with stock prices over the past ten years, I would not be particularly concerned that stocks have gotten ahead of themselves. After all, it is widely understood that the S&P 500 Index has become increasingly dominated by a handful of mega cap tech stocks that have delivered phenomenal earnings growth. Continue Reading…










