This chart predicts that the ongoing bull market in stocks will continue until 2025

It’s always exciting when a bull rally is predicted to last for several years, and according to Ned Davis Research, that’s exactly what we can expect with the current cycle. The cyclical bull rally that began in October 2022 is projected to extend well into 2025, based on historical trends analyzed by the renowned research firm.

In a recent note published by Ned Davis Research, a chart showcasing past cyclical bull rallies within a secular bull market, like the current one, was presented. The analysis indicates that the average duration of the rally, starting from the October 2022 stock market bottom, should continue through the summer of 2025. If compared to previous cycles, it could even stretch into 2026, mirroring the 2011-2015 rally, or extend all the way to 2030, following the path of the tech-fueled rally from 1990 to 1998.

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Despite a slight correction in the stock market, with the Nasdaq 100 experiencing a nearly 10% drop from its recent peak in July, Ned Davis Research remains bullish on equities. The firm views the correction as a short-term pullback rather than the end of the bull rally, attributing the decline to seasonal weakness during the summer.

“The global soft landing evidence and accommodative monetary policies continue to bode well for long-term equity performance,” stated Ned Davis Research in its note. The firm suggests maintaining an overweight position in equities, with the correction presenting a buying opportunity. Currently, the recommended allocation is 70% to equities, 25% to bonds, and 5% to cash in a balanced portfolio.

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One key indicator to monitor the health of the bull rally is corporate earnings. Ned Davis Research advises investors to pay close attention to earnings results, noting that the rate at which US companies are beating analyst profit estimates has exceeded 75% for five consecutive quarters. Any decline in this momentum could serve as a warning sign for potential market weakness.

In conclusion, Ned Davis Research expects the recent correction in the stock market to be short-lived, giving way to another leg higher in the ongoing bull market. With solid valuations, positive macroeconomic indicators, and supportive monetary policies, the firm remains optimistic about the future trajectory of equities. Stay tuned for more updates on market trends and investment opportunities here at Extreme Investor Network.