Predicting the end of this bull market

No bull market lasts forever, but investors cannot possibly predict exactly when it will end. Analyst Robert Stephens looks at the current market and a high-quality FTSE 100 stock for long-term investors.

3rd December 2025

Bull and bear icons

Investor concerns about the prospect of a stock market crash have intensified over recent weeks. The volatility index (VIX), which is often referred to as Wall Street’s “fear gauge”, recently spiked to its highest level since the market correction during April.

This evidences investor concerns regarding whether artificial intelligence (AI) can ultimately deliver on its much-hyped potential and if stock market valuations have become excessively high following a period of exceptionally strong growth that has seen the S&P 500 index and the FTSE 100 index make several new record highs.

Investors are also worried about whether a continued uncertain period for the world economy amid above-target inflation, elevated interest rates and ongoing geopolitical risks will negatively affect company earnings, and thereby share price performance, over the short run.

Stock market unpredictability

Of course, it is understandable that investors have such concerns. After all, no bull market has ever lasted in perpetuity, with it having always been replaced by a bear market. The problem facing investors, though, is that it is impossible to predict exactly when a stock market crash will occur. Red flags surrounding market valuations, the economy and geopolitical uncertainty, as well as countless other risks, can be present for many months, or even years, before a bull market ultimately comes to an end.

For example, in the case of the FTSE All-Share index, the average length of a bull market since 1970 is around seven years. This compares with the current bull market’s length of roughly 5.5 years. The previous bull market, which lasted from the depths of the global financial crisis to the beginning of the Covid-19 pandemic, went on for nearly 11 years. This was in spite of many investors predicting its demise well before its end, with rich market valuations and various other red flags being given as reasons for a market crash that took much longer to arrive than anticipated.

As a result, investors who predict there will be an imminent market crash could easily be proved wrong. Indeed, annual inflation across developed economies is widely expected to moderate over the medium term so that it consistently meets central bank targets. This should provide scope for additional monetary policy easing that, alongside recent interest rate cuts, has a positive impact on economic growth and company earnings, thereby helping to justify today’s elevated market valuations.

A buy-and-hold strategy

Rather than trying to forecast when the FTSE 100 index or S&P 500 index will crash, it may be simpler and more logical to instead adopt a buy-and-hold strategy that doesn’t seek to time the stock market. Although such a strategy leaves investors exposed to the stock market’s inherent volatility, which may include periods of severe decline, equity markets have ultimately generated exceptional total returns over the long run.

For example, the FTSE 100 index’s annualised total return since its inception in 1984 is in excess of 8%. When compounded over the long run, this rate of return could have a hugely positive impact on a portfolio’s total valuation.

Investors, of course, can potentially beat the wider stock market’s performance by focusing on high-quality companies that are undervalued. They are likely to include firms that benefit from having a solid balance sheet and a clear competitive advantage, as well as other attributes including strong cash flow and a sound strategy. Over time, they could deliver superior earnings growth, as well as the prospect of an upward rerating, that produces a relatively attractive capital return vis-à-vis the wider stock market.

While the FTSE 100 index’s elevated price level may suggest there is likely to be a dearth of attractively priced, high-quality companies at present, several UK-listed large-cap stocks appear to offer long-term investment appeal. Holding a diverse range of them for the long run, rather than seeking to time what is a highly unpredictable stock market, could prove to be a worthwhile move

Dividends can be more reliable than share prices as they’re driven by
the companies performance itself and not by the whim of investors.

As part of a total return / reinvestment strategy, this income could be
reinvested into income assets or back into the equity market
depending on the relative valuations.

The emotional benefits of dividend re-investment.
In fact, with this investment strategy you can actually welcome falling share prices.