The 1920s were a time of widespread prosperity in America. Flappers we all the rage as were new technologies such as radio, motion pictures, home appliances, automobiles, telephones, and electricity. American ingenuity ushered in a new age of mass production making technology affordable and widely available. GDP in the U.S. dwarfed that of other nations and we became the wealthiest and most powerful nation in the world. 

Many things have changed over the past 100 years, but we have no less reason for optimism. We live in a remarkable time where knowledge doubles every few years – faster than any time in history. We experience technological breakthroughs on a regular basis, things thought to be the stuff of science fiction: artificial intelligence, robots, military lasers, and hypersonic travel just to name a few. It's an exciting time to be alive.

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Predictions of what the new decade has in store depend on who you ask. Some say the economy is a bubble about to burst while others think we are just getting started. Past performance is no guarantee of future results, but history is a better barometer than pundits who often get things wrong.

Based on market history dating back to the Great Depression, the average bull run on Wall Street lasts 4.7 years. At 10.7 years and counting, we are currently in the longest bull run in U.S. history. The previous record was 9.4 years set back in the 90s. The fact that we are in uncharted waters in terms of bull market longevity bodes well for the bubble-bursting crowd. However, another statistic favors those who believe the economy has more room to grow: in the 23 presidential election years since the Great Depression, only four saw a downturn in the economy. All politics is local and it doesn’t get much more local than your wallet. 

Are we saying the folks in Washington influence the market? Yes. There’s interest rates for one thing, and “quantitative easing" for another – the practice of pumping tax dollars into the market. The games began long before the current administration and they will continue long after it’s gone. That taken together with unemployment at a 50-year low says 2020 will likely be a good year for stocks, at least until the election.

Conclusion

Will we see a repeat of the Roaring 20s in the decade ahead? Who knows? If we do, let’s hope there’s not another Prohibition or Great Depression. The good news is that even if there is a stock market crash, it won’t happen all at once. When the market turns sour, as long as you are paying attention there is time to read the tea leaves and get out. 

Photo credit: Pixabay Eggstack News will never post an article influenced by an outside company or advertiser. Our mission is to help you overcome uncertainty about retirement planning and inspire confidence in your financial future.