We are now in year eight of a U.S. equity bull run. U.S. equities, as defined by the Russell 3000, have returned 15% on average since 2009, making this their second-longest hot streak since a decade-long run in the 1990s. Thanks to the global monetary stimulus policies of the Federal Reserve and other central banks, equity investors have reaped the benefits of double-digit gains in six out of the last seven years.
But is this trend justified? Yes, the U.S. economy continues to hum along right at around 2% annualized growth. Unemployment has ticked down as individuals have reentered the labor market and found work, and corporations have rebounded in terms of sales and earnings growth. We also see consumers going about their business and supporting the economy with additional spending.