The Roaring 2020s Are Prodding the Bull

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The Roaring 2020s have been very good so far, but not exceptional when examined in isolation. That said, when viewed in the context of the past 16 years, this record-breaking bull market is spectacular.

Recency bias leads the human brain to believe there will be more of the same. However, history suggests otherwise; expensive markets tend to become less expensive.

The roaring 2020s

U.S. stocks and gold have led the Roaring 2020s asset classes. The chart below depicts the performance of the S&P 500 and the returns of key asset classes from 2020 to 2024.

US Stocks

Inflation fears are a reasonably explanation for both stocks and gold leading in performance.

Multi-asset portfolios, as measured by target date funds, have fared very well during the same time period, earning 9% per year for aggressive approaches and 5% for conservative ones, as shown in the graphic below.

The 2020s are, in fact, roaring. However, they are not that exceptional relative to other five-year periods, as shown in the following:

2020 2024

A more enlightening perspective is revealed by looking further back to the beginning of the recovery from the 2008 financial crisis.