Despite obstacles the bull market turns 5 Yahoo7 Finance Australia

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Despite obstacles, the bull market turns 5

The US stock market has enjoyed a five-year bull run.

Here’s what you could’ve won:

Since starting its advance in March 2009, the SP 500 has handed investors a total return, including re-invested dividends, of 209 per cent. If you’d played it safe and invested in bonds, your total return would be 28 per cent over the same period, according to the Barclays US aggregate index, which tracks the broader debt market. If you’d played it even safer and invested in short-term government debt, certificates of deposit and other short-term debt securities, your return would be even smaller.

Fidelity’s money market fund, which makes such investments, returned 4.1 per cent over the same period.


The best-performing stocks in the SP 500 index during the five-year bull market are a drugmaker, a hotel company and a broadcaster. Regeneron Pharmaceuticals, which is developing an experimental asthma drug, has climbed from $US12.40 in March 2009 to $US328.11 on Friday. That’s a cumulative return of 2,546 per cent, making it the best-performing stock since the start of the rally.

Wyndham Worldwide, a hotel and lodging company that owns the Ramada and Days Inn, has soared from $US3.10 to $US75.70 as demand for hotels revives. The company has also raised its dividend.


Among stocks still in the SP 500 index since the start of the bull market, the worst performers are a solar panel maker, a mining company and a supplier of wholesale electric power.

First Solar’s shares are down from $US108.36 to $US56.11, a drop of 48 per cent. The company has struggled to adapt to sharply lower panel prices. Newmont Mining has dropped from $US37.79 to $US24.60, hurt by falling gold and copper prices.

Exelon, the largest US supplier of wholesale electric power, has dropped from $US43.84 to $US29.82 as electricity prices have fallen.


When the stock market hit rock bottom, the economy was struggling, too. Jobs were harder to find five years ago and the US had yet to emerge from the Great Recession. Economic growth has since strengthened, but the recovery remains slow.

When the bull market began in March 2009 the unemployment rate was 8.7 per cent. It rose to 10 per cent in October that year, its highest level in 26 years. It has since fallen, and was 6.7 per cent in February.


SP 500 companies earned an average of $US60.81 per share in 2009. Those earnings are projected to almost double to $US118.16 by the end of this year, according to SP Capital IQ data. Corporate profits have climbed as companies have cut costs and demand has revived.


Twitter shares now trade in the stock market, following its initial public offering in November. Facebook had a $US16 billion IPO in May of 2012 and became a member of the SP 500 in December.


Like the stock market, billionaires have also staged a comeback.

In 2009, the number of billionaires in the world shrank by 30 per cent to 793, with an aggregate wealth of $US2.4 billion ($A2.66 billion), according to Forbes. The latest list of billionaires published last week shows that their ranks have more than doubled to 1,645, with a combined wealth of $US6.4 trillion. The rebounding stock market has helped boost those numbers.


The American car industry has roared back. Crushed by unsustainable debt and sliding sales, General Motors filed for bankruptcy on June 1, 2009, and got government funding to help it recover. Since then, it has ditched its Pontiac, Saturn, Hummer and Saab lines. The car manufacturer returned to the stock market in November 2010.

Its stock closed at $US37.69 on Friday, and is up 35 per cent in the past year. Chrysler also filed for bankruptcy and has been acquired by Italian car maker Fiat. The only big US car maker to avoid bankruptcy was Ford.

Its stock has surged from $US1.74 in March 2009 to $US15.62 as of Thursday — a gain of 800 per cent.

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