Some have called this the most hated bull market ever. Richard Bernstein just calls it what it is – a bull market like most others that are based on periods of fear. In his latest research note, Bernstein says this bull market is not so different from past bull markets:
“Investors have the impression that bull markets are days of wine and roses. However, nothing could be farther from the truth. Bull markets are periods of fear. This becomes quite obvious when one examines the valuation and sentiment data associated with the 1982, 1990, 1995, and 2003 bull markets.
The current bull market, which began in March 2009, seems to be fitting the historical precedent. The S&P 500 has appreciated nearly 100%, yet most observers are hesitant to concede that the US stock market is in a bull phase. Individual investors are still searching for protection, and ignoring the fact that equities have appreciated significantly more than the fixed-income yields for which they search. Institutional investors are still looking for “absolute returns” and paying high fees to alternatives managers instead of simply buying old-fashioned stocks.
This pervasive hesitancy to invest in US equities despite the asset class’s significant performance further cements our bullishness regarding the asset class. Bull markets typically end with over-enthusiasm, and not the fear that is so prevalent today.”
Source: RBA Advisors