• Although the growth and momentum investment styles have made a big comeback relative to the overall S&P 500 Index since the middle of May 2021, we do not expect the recent bounce-back in the growth and momentum styles at the expense of value and cyclical stocks to be a long-lasting one.
  • Market declines should serve as reminders that maintaining a disciplined approach in all market environments can help investors stay on the path to achieving their long-term investment objectives.

The latest bull-market cycle began during the worst phase of the economic cycle, as is often the case. Many countries were locking down their economies as deaths from COVID-19 were rising in uncontrolled fashion in the northeastern US and throughout Europe. When it became clear that massive monetary and fiscal support was on its way, markets responded immediately in anticipation of a successful rescue effort. 

What has perhaps been more surprising is the relentlessness of the global stock-market rally over the past 18 months, with the S&P 500 Index setting the pace. As illustrated in Exhibit 1, despite ongoing challenges—such as the repeated waves of new COVID-19 infections around the world; the persistent shortages of goods and labour; ever-surging inflation rates; and the imminent fading of government economic relief—the bull market has continued its advance. In fact, the S&P 500 Index managed to avoid even a minor dip of 5% until the last trading session of September, when it posted a 5.06% drop from its all-time closing high achieved 2 September 2021. It had been almost a full year since this measure of the stock market last recorded a drop of 5% or more.


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Data refers to past performance. Past performance is not a reliable indicator of future results.

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