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At the beginning of this month, we marked two years since the start of the current S&P 500 bull market. It's fair to say it's been an incredible two years for investors – over this period the stock index is up around 60%.
Is it time to rack up some profits for my ISA after this huge bull market run? Let's discuss.
<h2 class="wp-block-heading" id="h-my-s-amp-p-500-stocks“>My S&P 500 stocks
I have quite a few S&P 500 stocks in my portfolio. Currently, I have large positions in 'Magnificent 7' stock amazon (NASDAQ:AMZN), Apple, NVIDIA, Alphabetand microsoft.
I also have significant positions in payments giants. MasterCard and Visa. In addition to this, I have shares in Uber, Airbnb, KLA Corp., Lam Research, Coca-cola, Edwards Life Sciencesand Estee Lauder.
Overall, I have quite a bit of exposure to the index.
Tons of potential
Now, many of these stocks currently have lofty valuations. Many of them have increased significantly in the last two years.
However, I am a long-term investor with an investment horizon of 15+ years. And from a long-term perspective, I still believe that most of these stocks have great potential. Take amazon as an example. Looking at what's happening inside the company today, I can see the stock going much higher in the coming years.
Today, amazon is making great strides in the digital advertising space. This could significantly increase your revenue and profits in the coming years, as digital ads can be very lucrative.
It is also making significant strides in the satellite broadband industry through its Project Kuiper initiative. The goal here is to bring fast, affordable broadband to unserved and underserved communities around the world.
Of course, amazon also operates in the artificial intelligence (ai) space. amazon Bedrock, for example, allows companies to create their own unique ai models (like ChatGPT).
So while the stock is up about 120% over the past two years, I don't think it would be wise to sell it today. Over the next five to ten years, I can see it increasing substantially from current levels.
Of course, if my time horizon were shorter, my attitude would probably be different. For example, if I wanted to retire in two years, I might consider taking some profits from stocks today.
This is because it can be quite volatile at times. If earnings were to fall short of expectations due to investments for growth (amazon will release its third-quarter earnings later this week), or if sentiment toward tech stocks deteriorated, its share price could fall between 10% and 20% in the blink of an eye.
However, given my time horizon, I'm happy to hold onto it for now.
This bull market has further to go
I will note that I wouldn't be surprised to see some volatility in the S&P 500 in the coming months. In early November we have the US elections and stocks tend to be volatile leading up to this event.
Meanwhile, there are many other factors that could shake the markets in the near term, including geopolitical conflicts and economic data.
However, I expect the overall trend of the S&P 500 to remain bullish. Since we are in the middle of a technological revolution, I believe this bull market has strength.
