The bullish momentum in the U.S. stock market, which is held for the seventh consecutive year, brought investors with $14 trillion, estimated the Agency Bloomberg. During those 84 months the index of wide market S&P 500 grew by nearly 200%, that is, investments made in early 2009 to 10 March 2016 has tripled in price. On the NASDAQ, specializing in the shares of IT companies during this time the growth was 284%.
Most since March 2009, the stocks of companies in the consumer and financial sectors: almost 400 and 250%, respectively. The growth of shares of companies in the industrial sector amounted to nearly 250%. Shares of medical and pharmaceutical companies have shown a threefold increase.
Eight years ago one of the most famous investor, Berkshire Hathaway head Warren Buffett had bet that the U.S. stock index S&P 500 over the coming decade will perform better than the index, the hedge funds, if the latest figures will be included fees from investors. By the end of last year, that is, during the eight years of the dispute, the yield of positions in the Buffett Fund Vanguard S&P 500 Index Fund that tracks the movement of the S&P 500 index amounted to $ 65,67%, reported Fortune.
According to the Agency, investors are questioning the continuation of the upward trend: over the past 18 months the S&P grew by only 0.5%. They are concerned about the reduction of revenues by slowing economic growth in China and uncertainty regarding future Federal reserve policy. Because of this, investors are selling shares close to a record pace: in the last 12 months from mutual and exchange-traded funds was withdrawn $140 billion.
In January 2016, in the first four days of trading, the U.S. stock market experienced record since 1987 collapse: from 4 to 7 January, the Dow Jones fell by 911 points (5%), the S&P 500 2.4% and NASDAQ by 6%. The collapse occurred on the background of turmoil in the Chinese market: January 4, for the first time in the history of trades on the Chinese stock markets have been suspended after the composite index CSI 300, which is calculated from shares, traded in Shanghai and Shenzhen, fell on the first trading day of 2016 by 7%.
The collapse of the market in January, ultimately may play into the hands of the bulls, says Bloomberg. In the background are cheap deals that might encourage future buyers. Thus, banks and insurance companies listed in S&P 500, which received last year a total of $228 billion in profits, still does not enjoy the confidence of investors because of its behavior in January. The ratio of the value of their shares to profit from 13.6 is the lowest among 10 industries, financial institutions are traded at 24% discount to the S&P 500 index.
The result of excessive optimism on the markets bulls is, as a rule, their collapse, says chief investment strategist Charles Schwab & Co Liz Ann Saunders. “The growing pessimism, skepticism and unwillingness to invest in stocks that we saw during the last “trend” pulses” — a phenomenon that is unique to them,” she explains Bloomberg.
Senior Vice President research company James Investment Research, which manages assets of $6.5 billion, not ready to admit defeat. “Too many “bears” vs “bulls” and too much cash. This means that the market can do better”, — he assured.
According to analysts surveyed by Bloomberg bull market will last at least until the end of the year, the S&P will rise at least until 2158 points, that is, 9% from 8 March 2016. If the growth will continue until the end of April, this bull market will be the second largest in U.S. history.