Bull markets historically last much longer than bear markets — the average US bull since 1928 has lasted 4.5 years and produced cumulative gains of around 150%, versus an average bear of 1.4 years and a 35% drawdown. The bull market from March 2009 to February 2020 lasted nearly 11 years and delivered a 400%+ total return on the S&P 500.
Bull markets typically begin in the depths of a recession when sentiment is darkest, are driven first by valuation expansion (multiples re-rating off lows), then by earnings growth as the economy recovers, and eventually run on momentum and speculation before ending in a correction. Recognising the late phase is difficult in real time.
Investor behaviour during a bull market is the principal determinant of long-term outcomes. The temptation is to add risk near the top, justifying lofty valuations with 'this time is different' narratives. The discipline of rebalancing — trimming back to target weights — is unglamorous but compounds enormously over decades.
An investor enters the market in 2009 with CHF 50,000 in an S&P 500 ETF. By February 2020 the position is worth CHF 215,000 — a 330% gain over 11 years, or about 14% per year compounded.