This bull market can go on for a bit longer

All bull markets always go on longer than anyone rational thinks they should. This one is no exception, says Merryn Somerset Webb.

Here is a list of things we are pretty sure of. Valuations of almost all assets are expensive by historical standards. The shrinking of central-bank balance sheets matters: if quantitative easing (QE) pushed markets up, quantitative tightening (QT) will surely bring them down. Full employment will eventually lead to inflation. Peak social media something that, alongside Trump's hostility to the likes of Google, has to have implications for the stock prices of the tech darlings is almost upon us. And markets can't ignore politics forever: unrest in Italy, Sweden and Germany matters.

Here is another list of things we are also fairly sure of. You can ignore politics for a very long time: as Adam Smith noted, it takes "a great deal of ruin" to damage the systems of a secure nation. Some valuations are actually cheaper than they were a few years back (rising profits in the US have meant falling p/e ratios). One should be careful of predicting disaster more often than absolutely necessary. Inflation doesn't necessarily bother bull markets until it hits 4%-plus. And finally, all bull markets always go on longer than anyone rational thinks they should.

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.