The Bull market started 30 years ago today. Yes, it’s been interrupted by a few brief technical down 20% Bear markets, but move from a Dow Jones closing at 777 on August 12, 1982 through 13,161 today is an era defining trend. It didn’t just coincide with a 31 year decline in interest rates from a peak for 3 month T Bills of 16% in May of 1981, and a 32 year decline in inflation, which stood at 13.5% in 1980, it was driven by stocks becoming more attractive than fixed income bonds.
What does it really mean? Simply, the market and the economy transitioned from funding fixed assets (oil, gold, land) to funding ideas. Software, the ultimate idea, was born and grew through this 30 year run. I don’t think it’s matured yet.
The path towards many destinations 30 years out will depend on how the market and the economy transition from here. Printing money doesn’t drive markets, productive ideas do.
Yes, it is harder to argue that stocks can go up as interest rates go up, but it does happen.