As technology has advanced, so have our expectations of the speed at which we should see results. We are now living in an instant gratification society, where we expect to receive a constant stream of information, quick receipt of orders, minimal discomfort, and instant satisfaction and fulfillment. Our society is overstimulated, and expectations are high and immediate. When we think about the current market environment, we can see investor sentiment reflects this culture shift of instant gratification. We see headlines noting lingering inflation, extended rate increases and prolonged anticipation of market movements. We have a desire to feel better faster and this desire outweighs the reality that there is a flow to how the market and the economy work their way through a cycle, and it is rarely instantaneous.
Every market cycle has its own feel, but the current cycle has felt unique in that everything seems prolonged in its nature. This may be recency bias given we are coming off a very short-lived market cycle in 2020 and a very long-term, low inflation and low interest rate environment the decade preceding. According to an article by Hartford Funds, the average bear market is 9.7 months. The bear market in 2022 lasted just over 12 months, hitting its low in October 2022. In a typical market cycle, we spend an average of 77% of the time in positive markets and we recently entered bull market territory in June.
We are still working our way through lingering inflation, with recent CPI (Consumer Price Index) data indicating a 3% increase for the last 12 months ending June 2023. It is important to note that inflation has been consistently declining for the last 12 months and we are now significantly below the peak of 9.1% in June 2022. By the end of the quarter, the Fed had paused rate increases but we have since seen an additional 0.25% increase in July. With recent CPI data coming in below expectations, the Fed may pause again but they have made it clear they intend to continue an aggressive stance to bring inflation down.
The S&P 500 increased 8.7% this quarter and officially entered bull market territory in June, having recovered 24% since its low in October 2022. There has been caution and a lack of confidence entering this bull market because most of the performance has been driven by few stocks, now being referred to as the Magnificent Seven (Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia and Tesla). More optimism is likely to follow broader participation in market returns.
The looming restart of student loan payments is likely to have an impact on consumer spending and the upcoming election year could create uncertainty for investors. How this may play out in the upcoming months is unclear. We are positioning your portfolios to withstand any additional headwinds in the upcoming months, but we are encouraged by the positive strides that have been made with inflation and market returns.
Though we wish we could be further along in this cycle, we can see the progress made and the opportunity ahead. We are long-term investors and as such, we will be faced with many market cycles throughout our time horizon. The challenging part of these cycles test our resolve but there would be no opportunity without uncertainty. We welcome any questions you may have, and we look forward to seeing you in the months ahead.
Thomas L. Menzel, CFP® Laura Biermann, CFP®President Vice President