Often quoted in major national media, Adam is a Chartered Financial Analyst (CFA®), a CERTIFIED FINANCIAL PLANNER™ (CFP®), and has been included on the Forbes NextGen Best-in-State Wealth Advisors 2019 list. He is a member of the CFA Society of Los Angeles and the CFA Institute. Adam helps establish asset allocation strategy as a member of the EP Wealth Investment Committee, which supports all EP Wealth Advisors and their clients. The Committee’s top-down approach to portfolio construction begins with an outlook on the economy’s likely direction, followed by the implications for different economic sectors and asset classes. This culminates in strategic selection of the individual stocks, bonds, mutual funds or other investments deemed most appropriate for each individual client’s portfolio.
Market Update: Investors Three Years Into the Bull Market
October 13, 2025
Three years ago, on October 12, 2022, the current bull market in the S&P 500 began following a 25% decline earlier that year. Since then, the index has gained just over 80%. Historically, since World War II, there have been 13 bull markets in the S&P 500, with an average duration of about four and a half years and an average gain of around 150%.
This market has been defined by narrow leadership, with much of the performance driven by large technology and AI-related companies. When measured on an equal-weighted basis, performance is roughly 40% lower than the standard index, reflecting a more concentrated market than usual.
The third year of the current bull market has produced about a 13% gain—nearly double the historical average for this stage. Although valuations are elevated and risks remain, history suggests the bull market could still have room to run, particularly if participation broadens beyond technology.
Short-term risks include the ongoing government shutdown, which has delayed the release of key economic data such as the Consumer Price Index and employment figures. In the meantime, third-quarter earnings reports, beginning with major banks, are expected to offer timely insight into economic and consumer conditions.
EP Wealth Advisors offers a comprehensive range of services to help you invest with greater insight, as well as develop a holistic wealth management strategy. To discuss your finances and investment goals, we invite you to contact one of our advisors.
Disclosures:
Video Summary:
Well, the bull market and the s and p 500 celebrated its three year anniversary yesterday. That was October 12th. And I know many, uh, don't like to think back to this time, but the bull market started October 12th, 2022, and this followed a 25% decline when the market peaked earlier that January, the market declined in response to the Fed, really aggressively raising interest rates in response to inflation that ultimately hit 9%.
And so it's been a few years. Let's see how we're doing compared to other bull markets. Uh, going back, uh, in history. So since the end of World War ii, there have been 13 bull markets in the s and p 500, and so far so good. We're looking at an s and p 500 that is up a little over 80% over the last. Three years now.
We know one of the, the themes that we've been seeing here in recent years is this idea of narrow leadership or, or very narrow concentration of leadership within the s and p 500, and we know so much. Of the performance has been driven by technology or tech adjacent companies in this artificial intelligence theme.
If we actually look at the equal weighted s and p 500 and, and really just level the playing field for everyone, don't look at things, uh, in terms of company size and let those large tech players really dominate their contribution to index performance. We actually see that performance for on an equal weighted basis is about 40% less.
So still good, but this is very different than what we've seen in historical bull markets where we're at. We've actually seen broad market, uh, participation to start. And so that is one thing that's a little bit different this time around. But, uh, I, I guess a, a few things I would point out about this most recent, uh, this current bull market is the fact that year three, which we are currently in, and, and just actually, uh, winding down up about 13%, uh, over the last year, that's about double what we've seen historically, uh, in previous bull markets.
And I think right now with the market at all time highs and, and really seeming to turn a blind eye to risks that are out there, I, I think a lot of people are asking themselves well at, at current valuations and knowing all the risks that are out there, is now the time to lighten up on exposure? Should I, should I move to cash?
Should I take my, my, my chips off the table? We have a neutral allocation to equities and, and risk assets generally in our portfolios. And we are mindful of the risks. But you know, there, there's a couple of things. We always say that valuations aren't a timing tool. I think they tell you, um, they, they help to.
Manage expectations, at least over the short term when things seem to be priced for perfection. But we also know that age is just a number when it comes to bull markets. If we look at these historical bull markets going back to World War ii, we actually see that the average duration is a little over four and a half years.
And the average gain over these, uh, over these bull markets is about, uh, 150%, a little over that. And so at three years and about 80% in gains. That would suggest that we still have some room to go. And so we, we would not expect this bull market to end just yet. We certainly wouldn't be surprised to see volatility after the run that we've seen, uh, especially since the April lows.
Uh, but we think that there's still some time here and that explains why we are still neutral in terms of our positioning. We, we look at, uh, a lot of the, the positive gains that continue to come from artificial intelligence, but we are mindful that if this bull market is going to continue, we will need to see that that participation in, in the market start to broaden out.
And so that's one thing that we are positioned for currently and we expect that to happen in the coming quarter. Now as we think about the potential risks, we also don't wanna be, uh, blind to the risks that are out there. We're in the middle of a government shutdown, um, really just to name one and we are.
In a sense, flying blind. Right now, we're not receiving data as we normally would. Uh, the, the CPI report the consumer Price Index, which would provide us with the latest read on inflation. It's due out this week, we're not going to get it. The Bureau of Labor Statistics that provides this number has actually said that they're going to put people back to work specifically just to, uh, provide this number.
But that number will be, uh, delayed. It'll actually come out a week from this coming Friday. I believe that's October 24th. The reason it's coming out. I think, uh, many probably have their, their, uh, own assumptions there or beliefs. But, uh, what what's been said is that this is really to provide, uh, the, the September inflation data that's going to be needed for COLA or cost of living adjustments that, that are provided to Social Security, uh, recipients.
Uh, the, these COLA adjustments are always based on third quarter inflation, and so they need that September number. Um, but I think it'll also be very timely for the Federal Reserve ahead of their meeting, which is at the end of this, their, uh, this month to hopefully show that inflation is, uh, is softening up a little bit.
Um, obviously, uh, things can change and so we could be surprised by that number, but the current expectation is that this will read, will support an additional rate cut at the next September meeting. Uh, w we are are really flying blind when it re when it comes to jobs data, we've seen the number of alternative measures of labor market data come out.
And so I think, uh, that's really anyone's guess right now. But I think the general consensus is that, that the labor market is softening. And if we were to receive that data, um, uh, as scheduled, um, if the government were shut down, I, I would imagine we would just continue to see more of the same. Now in absence of that data, one of the things that's, that we're on the lookout for, and it really starts this week, is third quarter, uh, earnings.
And so the earning season gets underway this week, uh, in a big way. It actually starts tomorrow, which is Tuesday, with a number of major banks reporting earnings. And so I think that's really going to take the place of this traditional data. Hopefully these banks will provide us with their read of the economy and how the consumer is doing.
And so we'll take whatever information we can get right now. And so I would expect, uh, all investors will be really, uh, uh, staying tuned for, for that and, and any guidance that, uh, management can provide as it relates to the broader economy. So, uh, I will leave it there for now. Uh, please as always, don't hesitate to reach out to your advisor if you wanna learn more about any of these topics.
But otherwise, I'll look forward to catching up with you next week.