9 reasons the bull market will continue

Check out the slideshow above and click through the slides to find out the nine reasons the bulls will keep running.

The current bull market is one that, according to a chorus of negative voices last year, wasn’t to be.

Discounting the market’s potential to grow substantially even after it had begun to do so, these bears persisted in predicting an imminent, market-dunning recession.

Of course, this didn’t happen. Now, here we are in mid-2024, with a market that has delivered a parade of new highs for major indexes.

It’s only natural for investors pleased with their returns to get itchy at this point, out of a defensive instinct to protect those gains. So, they wonder whether they should sell and go to cash to get historically high interest rates from money market funds or online savings accounts. While drawing these small but certain gains, they figure they could sit out a market decline.

One thing that makes them nervous is the new highs hit by major indexes. How long could this go on? If history is any guide, the answer is: for months to come. Most of the time, when the market hits new highs, it proceeds to hit more. Such is the nature of bull markets; growth begets growth, up to a point.

This is all well and fine, some investors say. But, like Rod Stewart, they need reasons to believe. Though a balanced view is always in order, in an economy as strong as the current one, negative indicators are few and far between. And at midyear, there are many reasons to believe the market will perform well the rest of 2024 and at least early into 2025.

Conclusion

These and various other factors clearly point to potential market growth for the rest of the year and into 2025. This will include continued growth of large companies, especially large tech companies, which will continue to dominate—though probably to a lesser extent as market performance broadens to other sectors.

In the second half of 2024, conditions will be highly beneficial to small companies, so much so that some analysts are calling the present the best opportunity for small-cap investors in years. A big reason for this is the likelihood of Federal Reserve board interest rate cuts this year. Small companies are more rate-sensitive from their greater need to borrow money. Also, there are early indications of a big upsurge in institutional investment flowing into small caps, which will increase price and demand.

Seldom over the last few decades have economic and market conditions been so generally conducive to the potential for near-term stock market growth — with good returns for those who invest in the right companies.

But this doesn’t mean the market has been transformed. Its nature as a highly changeable, dynamic entity remains the same. Thus, the potential for pullbacks is always there; but in a good market like this one, pullbacks are often followed by bounce-backs.

For intelligent investors with good perspective and up-to-date information, pullbacks may signal buying opportunities.

Dave S. Gilreath, CFP, is a founder and chief investment officer of Sheaff Brock Investment Advisors, an investment firm for individual investors, and Innovative Portfolios®, an institutional money management firm. Based in Indianapolis, the firms manage assets of about $1.5 billion as of 3/31/2024. Investments mentioned in this article may be held by those firms, Innovative Portfolios’ ETFs and affiliates, or related persons. There may be a conflict of interest in that the parties may have a vested interest in these investments and the statements made about them.