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Will this bull run forever?

October 4, 2021
clock 5 MIN READ
  • While we would not be surprised to see the S&P 500 stock price index pull back further from its all-time closing high achieved on September 2, 2021, keep in mind that bear markets are typically associated with significant economic disruption, which we do not anticipate occurring anytime soon.
  • If anything, we think such dips should serve as reminders that maintaining a disciplined approach in all market environments should help investors stay on the path to achieving their long-term investment objectives.

The latest bull-market cycle began during the worst phase of the economic cycle, as is often the case. Many countries were locking down their economies as deaths from COVID-19 were rising in uncontrolled fashion in the northeastern U.S. and throughout Europe. When it became clear that massive monetary and fiscal support was on its way, markets responded immediately in anticipation of a successful rescue effort.

What has perhaps been more surprising is the relentlessness of the global stock-market rally over the past 18 months, with the S&P 500 setting the pace. As illustrated in Exhibit 1, despite ongoing challenges—such as the repeated waves of new COVID-19 infections around the world; the persistent shortages of goods and labour; ever-surging inflation rates; and the imminent fading of government economic relief—the bull market has continued its advance. In fact, the S&P 500 Index managed to avoid even a minor dip of 5% until the last trading session of September, when it posted a 5.06% drop from its all-time closing high achieved September 2, 2021. It had been almost a full year since this measure of the stock market last recorded a drop of 5% or more.


  • Growth stocks exhibit steady earnings growth above that of the broader market.
  • High-multiple companies have stock prices that are high relative to their level of earnings.
  • Momentum refers to a trend-following investment strategy that is based on acquiring assets with recent improvement in their price, earnings, or other relevant fundamentals.
  • Value refers to a mean-reverting investment strategy based on acquiring assets at a discount to their fair valuation.

Index Definitions

  • The S&P 500 Index is an unmanaged, market-weighted index that consists of approximately 500 of the largest publicly traded U.S. companies and is considered representative of the broad U.S. stock market.
  • The S&P 500 Growth Index measures the performance of growth stocks in the S&P 500 Index. 
  • The S&P 500 Momentum Index measures the performance of securities in the S&P 500 Index that exhibit persistence in their relative performance. 
  • The S&P 500 Quality Index measures the performance of high quality stocks in the S&P 500 Index by quality score, which is calculated based on return on equity, accruals ratio and financial leverage ratio.
  • The S&P 500 Value Index measures the performance of value stocks in the S&P 500 Index.

SEI Investments Canada Company, a wholly owned subsidiary of SEI Investments Company, is the investment fund manager and portfolio manager of the SEI Funds in Canada. 

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Information contained herein that is based on external sources or other sources is believed to be reliable, but is not guaranteed by SEI Investments Canada Company, and the information may be incomplete or may change without notice. Sources include Bloomberg, FactSet, MorningStar and BlackRock.

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Index returns are for illustrative purposes only, and do not represent actual performance of an SEI Fund. Index returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index.

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