Riding the Bull: What History Says About the Average Length of US Stock Market Rallies
Riding the Bull: What History Says About the Average Length of US Stock Market Rallies Are you watching your portfolio grow and wondering, “How long can this bull market possibly last?” It’s a question every investor asks, from Wall Street veterans to new traders checking their 401(k).
While no one has a crystal ball, the history of the U.S. stock market—particularly since World War II—offers invaluable insights. By studying the average length of bull markets in the S&P 500, we can gain perspective, manage expectations, and anchor our long-term investment strategy in facts, not fear.
Here is a deep dive into the historical endurance of U.S. bull markets and what that means for your money.
The Historical Snapshot: How Long Do Bull Markets Truly Last?
A bull market is generally defined as a period when the S&P 500 index rises by 20% or more from its previous low, without experiencing a 20% or greater decline (a bear market) in between.
Since World War II, the U.S. stock market has experienced over a dozen of these sustained up trends. The data reveals a powerful truth that should comfort any long-term investor: Bull markets tend to be significantly longer and stronger than the bear markets that interrupt them.
Based on post-WWII data for the S&P 500, the averages are striking:
| Market Phase | Average Duration | Average Cumulative Return |
| Bull Market | 4.6 Years (or 56 Months) | ~157% to 160% |
| Bear Market | 9.6 to 14.0 Months | ~-30% to -35% |
In simple terms, for every one year the market has spent in decline since 1945, it has spent approximately three to four years on the rise.
The Myth of the “Average”: The Record Breakers
While the 4.6-year average is a useful anchor, it is crucial to understand that bull markets are not uniform. The average is significantly influenced by a few historic, extended rallies.
If you fixate only on the average, you might pull your money out too soon. The longest U.S. bull markets defied the mean by a huge margin:
1. The Dot-Com Boom (The Longest)
- Duration: October 1990 – March 2000
- Length: Nearly 9.5 years (113 months)
- Total Return: An astounding ~417% gain (on a price basis), fueled by the growth of personal computing and the internet.
2. The Post-GFC Rally (The Second Longest)
- Duration: March 2009 – February 2020
- Length: Just shy of 11 years
- Total Return: A powerful run, with the S&P 500 rising over 330% from its financial crisis low before the brief COVID-19 bear market struck.
These record-breaking rallies illustrate that the true ceiling of a bull market is not a date on a calendar but the eventual culmination of economic and monetary pressures.
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Why Do Bull Markets End? (It’s Not Just Age)
The length of a bull market is determined by fundamental factors, not just its age. These are the forces that historically trigger the transition into a bear market:
1. The Federal Reserve and Interest Rates
The most common catalyst is the Fed’s fight against inflation. When the economy overheats, the Federal Reserve typically raises interest rates to slow growth. These rate hikes make borrowing more expensive, dampen corporate profits, and make bonds a more attractive alternative to stocks, often signaling the end of an old bull market.
2. Economic Recession
A bull market often ends when the underlying economy falters and enters a recession. Corporate earnings contract, unemployment rises, and pessimism drives stock prices down. The stock market is typically a leading indicator, meaning it often enters a bear market before a formal recession is declared.
3. Valuation Extremes (The “Bubble”)
While the market can remain “irrationally exuberant” for a long time, eventually, stock prices can detach too far from corporate earnings. When price-to-earnings (P/E) ratios hit historic highs, the market becomes vulnerable. The smallest piece of bad news can trigger a massive sell-off, as seen with the bursting of the dot-com bubble in 2000.
For those investing in U.S. markets, the history of bull market duration offers three critical, user-friendly lessons:
1. Don’t Fixate on the Calendar: A bull market doesn’t end because it’s “old.” It ends when a fundamental economic problem—like high inflation or a coming recession—forces the market to re-price risk. The longest bull markets were multiples of the average.
2. Breadth Matters: Healthy bull markets see many stocks and sectors participating in the rally. If the S&P 500 is only being driven by a handful of mega-cap tech stocks, historians view that as a potential sign of underlying weakness.
3. Time in the Market Beats Timing the Market: The data overwhelmingly shows that the vast majority of your wealth is built during the long, strong bull phases. Trying to sell your stocks to avoid an average 10-month bear market means risking missing the first, and often most explosive, part of the next bull run.
The Bottom Line: While the average length of a bull market is just under five years, the best strategy is to remember that the market is inherently biased toward growth. Stay diversified, focus on your long-term goals, and let history remind you that in the U.S. stock market, the bulls are always in charge for the long run.