The unstoppable US bull market has now officially entered its tenth year. On Saturday March 9th, it was exactly ten years since the S&P 500 carved out its last major low point, making this the longest bull run in history.
The ten-year bull market has spurred a new generation of billionaires and generated more than $30 trillion in wealth.
But what if you bought in at the bottom? March 9th, 2009 will go down as the single best day ever to purchase stocks. It would have taken balls of steel (or pure luck) to get it right, but let’s see how much you would have made.
A $5,000 Investment in the S&P 500
Before we start, let’s clear up a few important numbers.
- March 9th 2009 - the S&P 500 closed at its bear market low of 676.53.
- March 9th 2019 - the S&P 500 closed at 2743.07 (note, it was a Saturday, so we’re taking Friday’s close for the purpose of this calculation).
This ten-year change marks a 305 percent gain for the largest stock market index in the US.
A modest $5,000 investment made at the very bottom of the market would fetch you $20,250.
That might not sound like too much, but if you increase the numbers, we see some huge gains. An $80,000 investment would result in $324,000. And a $250,000 portfolio would net over a million dollars.
Investing in Netflix at the Start of the Bull Run
Of course, the S&P 500 tracks the 500 largest American companies, so the gains are rounded out. If you picked your stocks individually, you would have made an even bigger killing.
Here’s a list of big-name tech stock gains over the same ten-year period:
- Netflix - 6,493%
- Amazon - 2,605%
- Expedia - 2,170%
- Nvidia - 1,862%
$5k to a Million with this Unknown Stock
Netflix might be the biggest high-profile winner, but there were much bigger winners over the last decade.
Patrick Industries, which makes building products, soared 28,821 percent. That $5k investment would have made you a millionaire. Other big movers include Jazz Pharmaceuticals with 23,328 percent gains and Nexstar Media Group with a 21,448 increase.
What Powered the Ten-Year Bull Run?
The last decade has been unprecedented in stock market history. It began with a 57 percent collapse after the banking crisis in 2008 which paved the way for an enormous recovery.
The bull run was supported by record-low interest rates designed to spur the economy. The Federal Reserve also turned on the money tap, pumping money into the market through a process called quantitative easing.
In honor of this bull market's 10 year anniversary, here's a chart plotting the S&P 500 Total Return Index's 10 year inflation-adjusted rate-of-change (i.e. including divdends, real returns)
— Troy Bombardia (@bullmarketsco) March 2, 2019
The stimulus propelled the US stock market to a record high in December 2018, before a sharp reversal curtailed growth. Some analysts believe the bull run will continue for another year if Trump agrees a trade deal with China.
Others are less optimistic, predicted a widespread collapse and recession. Either way, the next decade is unlikely to be as smooth as the last. The stock market can’t keep going up forever, can it?