Have you ever watched a market climb higher for years and wondered how much longer the ride can last? Next week the current bull market officially turns four years old. On October 12, 2022, the S&P 500 closed at its bear-market low of 3,577.03. Since that day the index has more than doubled, delivering a gain exceeding 115 percent and setting fresh all-time highs as recently as this week. That kind of longevity is rare, and the historical pattern that follows is even more interesting.
Why Four-Year Bull Markets Often Keep Running
Only a handful of bull markets since the late 1950s have managed to stretch across four full years. When they do, the average performance in the fifth year has been solid. Data compiled by market strategists shows that the typical fifth-year advance lands around 12 percent, with the median closer to 15 percent. Those numbers are not guarantees, of course, but they do tilt the odds toward continued progress rather than an immediate collapse.
What makes the picture more encouraging is the fundamental backdrop. Corporate earnings have expanded sharply through the first half of 2026, and analysts expect third-quarter profits to have grown nearly 30 percent year over year. That would mark the third straight quarter of growth above 25 percent. At the same time the broader economy has continued to expand at a steady pace, even while energy prices have risen and speculation about tighter monetary policy has increased.
The Weight of Historical Evidence
I have looked at these long-running bull markets more than once over the years, and the pattern is hard to ignore. Once a rally clears the four-year mark, the next twelve months have usually produced respectable gains. Pullbacks still occur—average maximum drawdowns in year five hover near 14 percent, with the median around 11 percent—but the overall direction has tended to remain upward. The strongest advances often cluster near the beginning and the end of a cycle, while the middle years deliver more moderate returns. The trouble, as any seasoned observer knows, is that you only recognize the exact stage of the cycle after the fact.
The weight of the evidence remains supportive as the bull market enters its fifth year. Continued economic growth, resilient corporate profits and a meaningful reset in valuations provide a solid foundation for maintaining a constructive stance.
That assessment captures the current environment pretty well. Valuations have cooled from earlier peaks, giving the market a bit more breathing room. Earnings momentum is still intact. Economic growth has not stalled. Those three ingredients have historically been enough to keep a mature bull market alive for at least another year.
Earnings Strength That Few Expected
One of the quiet surprises of 2026 has been the resilience of corporate profits. After the sharp recovery that followed the 2022 lows, many investors assumed growth would slow. Instead, companies have continued to deliver. Fact-based consensus estimates now point to nearly 30 percent year-over-year earnings growth for the third quarter. If those numbers hold, it will be the third consecutive quarter above the 25 percent threshold—an uncommon streak that rarely appears this late in a cycle.
What is driving the strength? Cost discipline remains tight across many sectors. Pricing power has held up better than expected in areas where demand is still firm. And the artificial-intelligence investment wave, despite occasional bouts of skepticism, continues to support revenue and margin expansion for a meaningful slice of the index. Even industries outside the technology sphere have contributed, which broadens the foundation of the advance.
In my view, sustained earnings growth is the single most important fuel for a bull market that has already traveled this far. Price-to-earnings multiples can expand or contract, but when actual profits keep rising, the market often finds a way higher over time. That dynamic appears to be in place right now.
Economic Growth That Has Not Rolled Over
Alongside the earnings picture sits a steadily expanding economy. Rising energy prices and the possibility of firmer monetary policy have created pockets of concern, yet overall activity has held up. Consumer spending has remained functional. Business investment, particularly in technology and productivity-enhancing equipment, has continued. The labor market, while cooler than its peak, has not broken in a way that would signal an imminent recession.
History shows that bull markets rarely end while the economy is still growing at a respectable pace. The combination of positive growth and rising profits has usually been enough to absorb higher interest rates or temporary spikes in commodity prices. That does not mean the path is smooth. It simply means the underlying current still favors advance rather than decline.
Valuations Have Reset Enough to Matter
Another supportive element is the valuation reset that occurred earlier in the cycle. When the market bottomed in late 2022, multiples compressed meaningfully. Even after the strong rebound of the past four years, those multiples have not returned to the most stretched levels of prior peaks. That leaves room for further appreciation if earnings continue to grow.
Investors sometimes forget that valuation is not a timing tool by itself. Expensive markets can become more expensive, and cheap markets can become cheaper. Still, when valuations start from a more reasonable base and earnings keep rising, the probability of additional upside increases. That is the setup many strategists currently describe.
What Year Five Typically Looks Like
Looking across previous four-year-plus bull markets, the fifth year has rarely been a straight line. Average maximum drawdowns of roughly 14 percent remind us that volatility remains part of the journey. Those pullbacks can feel uncomfortable in real time, yet they have usually been buying opportunities rather than the start of a new bear market.
The distribution of returns within year five also follows a familiar pattern. Gains often arrive in clusters rather than a smooth monthly grind. Periods of consolidation or modest declines are common, followed by renewed advances once the temporary obstacles fade. Patience has historically been rewarded more often than constant trading.
- Average fifth-year return near 12 percent
- Median fifth-year return closer to 15 percent
- Average maximum drawdown around 14 percent
- Median maximum drawdown near 11 percent
Those figures are not precise forecasts for the months ahead. They simply illustrate the historical tendency. Markets that have already survived four years of challenges have usually possessed enough underlying strength to deliver another positive year.
Risks That Still Deserve Attention
None of this means the road is risk-free. Rising bond yields can pressure equity valuations, especially for growth-oriented segments. Higher energy prices can squeeze consumer budgets and corporate margins in certain industries. Occasional cracks in the artificial-intelligence narrative can trigger sharp but temporary rotations. Each of these factors has the potential to produce meaningful pullbacks.
The key distinction is between temporary setbacks and structural breakdowns. So far the data has not pointed to the latter. Earnings are still rising. The economy is still expanding. Valuations are not at extreme levels. Until those conditions reverse in a sustained way, the historical odds continue to favor the bullish case.
I have found that the most useful mindset at this stage of a cycle is cautious optimism rather than either euphoria or panic. Position sizes can be managed. Diversification remains sensible. Cash reserves for opportunistic purchases during dips can prove valuable. Yet abandoning exposure altogether simply because a bull market has grown older has rarely been the optimal long-term choice.
How Investors Might Approach the Months Ahead
For those already invested, the evidence leans toward staying the course while remaining alert to changing conditions. Rebalancing after strong runs can lock in gains without abandoning the broader trend. Focusing on companies with durable earnings power rather than pure speculation helps weather the inevitable volatility.
For those sitting on larger cash positions, the historical pattern suggests that waiting for a perfect entry can mean missing further upside. Gradual deployment during periods of weakness has often worked better than trying to time an exact bottom. The average and median returns in year five indicate that time in the market has usually outweighed perfect timing.
Perhaps the most practical takeaway is simply to respect the trend until the fundamentals clearly deteriorate. Economic growth, corporate profits, and reasonable valuations have been the three pillars supporting this advance. As long as those pillars remain intact, the probability of additional progress stays elevated.
The Challenge of Knowing Where You Are in the Cycle
One of the enduring truths about market cycles is that their exact position is only clear in hindsight. What feels like the middle can later turn out to have been closer to the end, and what feels extended can continue far longer than expected. That uncertainty is why rules based purely on age or calendar time tend to fail.
Instead, focusing on the current health of earnings, the trajectory of the economy, and the relative attractiveness of valuations offers a more reliable compass. Right now those indicators still point in a constructive direction. History suggests that when a bull market reaches its fourth birthday under those conditions, the fifth year has more often than not continued the advance.
Will every day be higher? Almost certainly not. Will there be uncomfortable drawdowns? Almost certainly yes. Yet the broader trajectory has historically remained upward once a rally has demonstrated this degree of staying power.
Putting the Numbers into Perspective
Consider the magnitude of the move already achieved. From the October 2022 closing low near 3,577 to recent all-time highs, the S&P 500 has delivered more than a full doubling of value. That kind of recovery does not occur in isolation. It reflects genuine improvement in corporate profitability, a resilient consumer, and a technology-driven productivity impulse that continues to reshape large portions of the economy.
When such a powerful advance is followed by continued earnings growth and steady economic expansion, the market has usually found ways to climb higher still. The fifth-year averages of 12 to 15 percent may not match the explosive early gains of a new bull market, but they remain attractive relative to many alternative investments and relative to the risk of sitting on the sidelines.
Investors who stayed invested through the first four years have already captured substantial wealth creation. Those who remain positioned for the next phase stand to benefit if the historical pattern repeats. Of course past performance is never a perfect guide, yet ignoring the historical record entirely would be equally unwise.
Balancing Optimism with Realism
It is possible to acknowledge the constructive evidence without becoming complacent. Higher yields, elevated energy costs, and occasional disappointments in high-profile growth areas can all produce sharp corrections. The average maximum drawdown of 14 percent in year five is a useful reminder that equity ownership still requires a tolerance for volatility.
At the same time, those drawdowns have typically been temporary. Markets that possess underlying earnings momentum and economic support have usually recovered and moved to new highs. The ability to endure those interim declines has been one of the distinguishing traits of successful long-term investors.
In my experience, the investors who fare best at this stage of a cycle are those who combine a constructive long-term view with disciplined risk management. They do not abandon their positions at the first sign of trouble, nor do they ignore warning signals when they become persistent. They simply stay engaged with the data and adjust only when the evidence clearly shifts.
Looking Beyond the Immediate Horizon
While the focus naturally falls on the coming twelve months, the broader implication of a four-year-old bull market is that durable economic and corporate trends are in place. Productivity gains, technological investment, and adaptive corporate management have all contributed to the current environment. Those forces do not disappear overnight simply because a calendar milestone has been reached.
If earnings growth remains robust and the economy continues to expand, the market may well deliver another year of positive returns. If those conditions begin to erode in a meaningful way, the historical support for further gains would weaken. For now the balance of evidence still leans toward the constructive side of the ledger.
That assessment does not require blind optimism. It simply requires an honest reading of the available data and an appreciation for how markets have behaved under similar conditions in the past. Four-year-old bull markets have a track record of continuing, and the fundamental backdrop today does not appear to contradict that pattern.
Practical Considerations for Portfolio Construction
How should an individual investor translate these observations into action? First, maintain exposure to high-quality companies with demonstrated earnings power. Second, keep enough dry powder to take advantage of the pullbacks that history suggests are likely. Third, avoid over-concentration in any single theme, even one as powerful as artificial intelligence. Diversification remains a useful guardrail when valuations have already expanded.
Rebalancing after periods of strong performance can also help. Taking some profits from the biggest winners and redeploying into areas that have lagged can improve the risk-reward profile without requiring a complete exit from equities. That approach has served many investors well across previous extended bull markets.
Finally, keep the time horizon realistic. Year five is unlikely to match the explosive gains of the earliest stages of the recovery. Moderate but positive returns, interrupted by occasional setbacks, represent the more probable path. Accepting that reality can reduce the temptation to overreact to short-term noise.
The Broader Lesson from Long Bull Markets
Perhaps the deepest lesson from studying these extended advances is that markets can remain resilient longer than most people expect. The combination of earnings growth, economic expansion, and reasonable starting valuations has repeatedly proven powerful. While every cycle eventually ends, the end rarely arrives precisely when the calendar suggests it should.
Next week the current bull market will mark four years. The historical evidence indicates that reaching that age is more often a sign of continued potential than of imminent exhaustion. Pullbacks will almost certainly occur. Volatility will remain a constant companion. Yet the underlying trends that have carried the market this far still appear intact.
For investors willing to stay engaged with the data rather than the headlines, the fifth year of this bull market may yet deliver meaningful further progress. The path will not be linear, and the ride will not be entirely comfortable. But history suggests that those who remain positioned for growth have usually been rewarded when a bull market has already demonstrated this degree of durability.
That is the message the numbers send as the four-year milestone approaches. Whether the market ultimately follows the historical script remains to be seen. For the moment, the weight of the evidence continues to favor a constructive outlook.
