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We've just been through the longest bull market run since World War II.
In the six years from March 2009 to May 2015, the Dow climbed from 6,626 to 18,024. The S&P 500 rose from 683 to 2,108. Those were gains of 172% and 209%, respectively.
But the markets have reversed course over the last few months. According to Money Morning experts, we've left bull market territory and currently find ourselves in a bear market.
That doesn't mean you should ditch the markets, though. In fact, we've developed a specific investing guide for investors now that the bull market has ended – it'll help you protect your money, and even profit, during this volatile year.
But before we look at those opportunities, let's look at how this bull market lost steam in the first place…
In December, the Fed hiked interest rates – the first rate increase since 2006. Many investors weren't thrilled about the decision. The Fed raised rates at a time when the rest of the world's central banks were lowering rates. This monetary policy "divergence" disrupted the unanimity of the global economy and aggravated an already appreciating dollar.
The Fed interest rate hike also came at time when energy markets were in free fall. Crude oil sank from $40 a barrel in December to $30 a barrel in early January – lows that hadn't been reached since 2004.
To top off this dreary investing environment, China, Japan, and the Eurozone are projecting slower economic growth for 2016. Already, China just shook stock markets around the globe after it reported declines in its manufacturing sector. Japan just entered a recession. And many countries in the Eurozone are experimenting with risky negative interest rates to boost their economies.
All of these developments culminated in the Dow Jones Industrial Average's worst 10-day calendar start in history for January. And since hitting a high in May 2015, the Dow is now down 14%.
"More than 50% of S&P 500 stocks are now down 20% or more from their 52-week highs – and it is now a question of how loud the bear growls," said Money Morning Global Credit Strategist Michael Lewitt.
The great thing about the markets though: You can make money when they're going up or down.
That's why our experts put together a list of the best investments to make when bull markets end…
The Best Way to Invest When a Bull Market Ends
The best stocks to buy when a bull market ends aren't based on speculation. These stocks have a proven track record of beating earnings estimates and have balance sheets that can withstand even the toughest market downturns.
"In tech, that includes names like Facebook Inc. (Nasdaq: FB), Apple Inc. (Nasdaq: AAPL), and Alphabet Inc. (Nasdaq: GOOGL)," Money Morning Chief Investment Strategist Keith Fitz-Gerald said. "And select companies like The Coca-Cola Co. (NYSE: KO) that have a long history of increasing dividends through thick and thin. Also, put new money to work in companies like Raytheon Co. (NYSE: RTN)."
These stocks are perfect to hold for the next 5 to 10 years.
"As long as you're investing money that you won't need to spend in the near term and keep risk management top of mind, you can weather a downturn," Fitz-Gerald said.
Money Morning Options Trading Specialist Tom Gentile picks short-term market plays every week for his subscribers. And he's loving this bear market.
"The bull market's end gives traders the juiciest opportunities ever," he said.
Gentile helped his subscribers post a 100% return in the first week of the year, when the Dow declined by more than 900 points. Here's how he did it.
Like Gentile, Money Morning Capital Wave Strategist Shah Gilani also favors short-term plays during market downturns.
He prefers inverse exchange-traded funds and other short-term investments that gain when the stock market is performing badly. Check out some of his favorite picks, right here.
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