Is a New Bull Market Coming? Here's a Better Question to Ask

The past few years in the stock market have been a wild ride for many investors, with no shortage of ups and downs. For investors who have been around a while, these ups and downs have probably come as no surprise because the stock market is known for swinging between bear and bull markets.

After the bear market that defined much of 2022, investors may be wondering if a new bull market is coming. The short answer to that question is yes, eventually. A better question to ask, though, is where will the market be 10 to 20 years from now?

The ups and downs are inevitable

It's easy for investors to get caught up in the short-term happenings of the stock market.

Between the constant flow of information on social media, never-ending news cycles, and overemphasis on quarterly earnings, you can consume a little too much information if you're not careful. Being knowledgeable is important, but too much can be overwhelming.

One way to help ignore short-term noise in the stock market is by learning to expect (and embrace) the inevitability of volatility. If you expect volatility, keeping your eyes on the prize is much easier.

Warren Buffett once famously said, "If you are not willing to own a stock for 10 years, do not even think about owning it for 10 minutes." That's the mindset you want for your portfolio. If you buy stocks planning to hold them for the long term, you shouldn't worry much about their daily, weekly, monthly, or in some cases, yearly price fluctuations.

Imagine Trade Desk (TTD 1.67%) investors. Do you think they care about the 30% drop from September 2018 to December 2018, the 44% drop from February 2020 to March 2020, the 60% drop from November 2021 to July 2022, or the more than 340% gains they've seen since September 2018? A safe bet would be the latter.

Embracing volatility can keep investors from reacting emotionally to the stock market's ups and downs and making moves that can be counterproductive to their long-term goals, such as prematurely selling shares.

There's no doubt another bull market will happen

It's not a matter of if a bull market will happen. As history shows, it's a matter of when.

Let's take the S&P 500, whose performance is often used interchangeably with the stock market itself, for example. Since 2000, the S&P 500 has had seven negative years (based on Jan. 1 to Dec. 31 returns), yet it's up over 180% since then. Here are the index's returns since a few of those down years:

Data source: S&P 500 historical data / Growth rounded to the nearest whole percentage.

You can't predict how an individual company will bounce back from a bear market, but you can be all but certain that the overall stock market will eventually rebound and hit bull territory at some point.

Instead of sitting around waiting and anticipating when the next bull market will be -- which could cause you to make the mistake of trying to time the market -- use this time to your advantage.

A lot of quality companies are the cheapest they've been in quite some time; now can be a chance to grab some great stocks at a discount that are primed for good long-term gains.