Thestreet.com is reporting that today, October 9th, 2007, marks the fifth anniversary of the current bull market. It was five years ago to the day when the major US market indices reached their lowest point after the 2000-2002 slide.
Unless you own one of a handful of funds that bet against the market, the past half decade has been unusually rewarding. The rewards for those holding emerging market funds — especially those focused on Latin America — have been particularly munificent.
For a significant percentage of emerging markets funds, every dollar of value in the funds five years ago is now worth more than $5. And for holders of some Latin American funds, the payoff for every dollar in their respective funds in late 2002 is now approaching $10.
The author of thestreet.com article warns that the seemingly high returns must be viewed within context:
Although the rewards for the past five years might seem to be super-sized, they must be viewed in the context of the two-year market implosion that preceded the current bull run.
From its previous all-time high in March of 2000, half the value of the S&P 500 evaporated — 49.15%, to be exact — by the time the broad-based index bottomed on Oct. 9 of 2002. The then high-flying Nasdaq composite crumbled 77.89% from its 2000 peak to its 2002 trough.
While a 15,000 DOW may just be around the corner, let’s not forget that we have many different economic factors to consider this time around. During the last bull run, terms like “subprime mess, leveraged buyout, credit crunch, and mortgage meltdown” were hardly mentioned if at all. Many economists are confident that the United States economy is strong enough to survive any bumps that may be down the road, though it seems that all signs indicate consumer spending has slowed significantly which is sure to have some impact.