Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
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.

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:

A more enlightening perspective is revealed by looking further back to the beginning of the recovery from the 2008 financial crisis.
Prodding the bull
Coming into this decade, the stock market had been growing by an above-average 13% per year for 11 years – that’s a whopping 272% cumulative return. But then the 2020s prodded the bull with an even higher 14.3% per-year annual return – adding another 96% compounded.
Consequently, this longest 16-year bull market has earned 630%. Feel wealthier? You should. It’s been an amazing and unprecedented 16 years.

Conclusion
Books on smart gambling recommend a betting strategy that takes some of your wins off the table. If you leave them all in, the house will eventually wipe you out because its resources far exceed yours. A related saying is: “There’s room for the bulls and the bears, but not the hogs.” Enjoy your wins by keeping them.
Ron Surz is president of Target Date Solutions, developer of the patented Safe Landing Glide Path and Soteria personalized target date accounts. He is also co-host of the Baby Boomer Investing Show. Surz’s passion is helping his fellow baby boomers at this critical time in their lives when they are relying on their lifetime savings to support a retirement with dignity, so he wrote a book, “Baby Boomer Investing in the Perilous 2020s,” and he provides a financial educational curriculum.
A message from Advisor Perspectives and VettaFi: To learn more about this and other topics, check out some of our webcasts.
More Specialty Investments Topics >