NYSE
- After about two decades of a secular bull market, stocks could see their fortunes reverse in 2030.
- Sanctuary’s Mary Ann Bartels sees the potential for 20 years of flat stock returns.
- Fears of a “lost decade” have picked up as some see signs of an aging bull market.
A brutal downturn for equities could be lurking at the start of the next decade, a chief strategist is warning.
Mary Ann Bartels, the chief investment strategist at Sanctuary Wealth, said she expects the S&P 500 to enter a secular bear market beginning in 2030, marking the start of a 20-year period in which stocks see near-zero returns.
Bartels said she expects “amazing” gains in the S&P 500 before the benchmark index tips into an official bear market. The S&P 500 could land somewhere between 10,000 and 13,000 by 2030, which would imply the index rising as much as 75% from its current levels, she estimated.
“We’re going to end that cycle in a bubble,” Bartels, whose firm manages $58 billion in assets, said. “We go into a secular bear market for 15 to 20 years, meaning that stock prices are flat for that time period.”
Bartels pointed to what she called a decennial pattern in markets, which hangs on the idea that stocks trade in 10-year cycles.
The cycle typically begins with “euphoria” and general optimism about the direction of the US economy, Bartels said, which fuels a bull market over the course of a decade. Near the end of the cycle, stock prices see a huge spike, which is followed by a bear market.
Investors saw this dynamic play out in the 1990s, with the internet fueling a huge boom in markets and the economy that ended with the dot-com bust in the early 2000s. Stock returns were near flat for most of the following decade, making up what strategists have dubbed the lost decade for US stocks.
Stocks entered a fresh bull market shortly after the 2008 crisis, Bartel added, suggesting that the end of the equity run-up was approaching.
Talk about a lost decade for stocks has picked up on Wall Street as investors eye the market’s parabolic rally in recent years. The S&P 500 has rallied 238% from its low of 2,191.86 in March 2020 through Monday’s all-time high above 7,400.
Richard Bernstein, the global head of macro investing and strategies at Janus Henderson Investors, told Business Insider he was concerned about a possible lost decade in markets largely due to concerns about inflation, which could cause investments to underperform for an extended period of time.
In a client note late last year, Bank of America said it saw the S&P 500 shedding 0.1% over hte next decade.
Goldman Sachs, meanwhile, said it saw the US market coming in last place for returns over the next 10 years.
