Introduction
We are now coming up to the one-year anniversary of the low in share markets following the pandemic driven plunge a year ago. From their lows on 23rd March last year, US shares are up 73%, global shares are up 66% and Australian shares are up 53%. After such a strong rebound, there are naturally concerns that the new cyclical bull market in shares is at risk, particularly given the surge in bond yields. The counter argument is that it’s too early in the investment cycle to expect the bull market to be over. This note looks at where we are in the investment cycle.
The history of cyclical bull markets since WW2
When thinking about this issue, it’s always useful to start by having a look at past cyclical bull markets in shares. The next table shows cyclical bull markets in US shares since World War 2.