Happy 2nd birthday, bull market! What now?

chart_bull_market.top.gifResearch shows that different sectors historically outperform during each of the three stages of the stock-market cycle. The market is currently heading into the middle- to late-stage of the bull market. By Hibah Yousuf, staff reporter

NEW YORK (CNNMoney) -- The bull market is celebrating its second birthday. Banks and retail stocks have led the way but investors may want to think about changing their bets if they think the party is going to continue.

The S&P 500 has doubled in value from the bear market low of 666.79 on March 6, 2009. All ten sectors in that index have rallied, according to Standard & Poor's Equity Research.

Bull market's big winners
Here's how the S&P 500 sectors have performed since the March 2009 lows.
Financials 170%
Consumer Discretionary 145%
Industrials 140%
Materials 123%
Information Technology 115%
Energy 86%
Consumer Staples 52%
Health Care 47%
Telecommunication Services 42%
Utilities 41%
Source:Standard & Poor's Equity Research

But if the economic recovery continues to pick up steam, different sectors of the market will begin to take the lead.

"It's important for investors to understand how different sectors perform during different periods of a stock market's cycle and as the economic recovery matures," said James Stack, a market historian and president of InvesTech Research.

According to Stack, the average period between the start of a bull market and the start of the subsequent bear market is less than four years.

"As we come upon the bull market's second birthday, we're moving into the latter half of this rally," he said.

By historical standards, that means financial firms and consumer discretionary companies, which have been among the current bull market's biggest winners, may lose some of their luster.

"Financial companies suffered the most severe pain during the recession and have bounced back to become the best performing sector because the government stepped into to offer support," said Christian Hviid, chief market strategist at Genworth Financial Asset Management.

That includes AIG (AIG, Fortune 500), which nearly collapsed in September 2008 before the government bailed it out with $182 billion. The insurer's stock has shot up a remarkable 430% since the market bottomed and is among the S&P 500's best performers during the past two years.

While they may not shine as brightly, Hviid said financial company shares will continue to deliver solid returns.

"The financial sector is still unloved, so it may be a good contrarian play," he said. "Banks are still trading at deep discounts, and it seems like we're turning a corner in terms of loan growth and charge-offs."

Meanwhile, the retail sector, which has surged nearly 150% from two years ago, won't continue its stellar run, Hviid said. He thinks profit margins will come under pressure from higher commodity costs.

Technology stocks are also typically strong performers in the early part of a bull market, but since consumer and business spending has been only slowly recovering, the sector has barely outperformed the broader market.

But as consumers and corporations begin to loosen their purse strings, experts say tech stocks will continue to rise.

Take me to your new leaders

As the bull market continues its course, energy stocks, which have thus far underperformed the market, are likely to take the spotlight.

"Investors are already looking at the energy sector because of surging oil prices, but the sector will do well even beyond the unrest in the Middle East," Hviid said. "It's attractive based on global growth outlooks, especially as energy consumption increases in emerging markets."

Materials, industrials and telecom stocks are also poised for solid gains, InvesTech Research's Stack said.

While the health care sector is usually a defensive pick during a falling market, the sector may begin to surprise investors a bit earlier.

"Health care stocks didn't have a good 2010, but we're past the aftermath of health care reform," said Joe Milano, portfolio manager of T. Rowe Price's New America Growth Fund (PRWAX). Health care companies, including Covance (CVD) and WellPoint (WLP, Fortune 500), represent about 15% of the fund's holdings.

Plus, even though experts largely agree that the broader market has yet to peak, it's never too early to play it a little safe.

"We have all the ingredients for the bull market to continue," Stack said. "But we know it won't last forever, and it's better to add some defensive positions on a gradual basis than it is to make a dramatic move after all the warning flags pop up." To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed4.12%4.00%
15 yr fixed3.14%3.00%
5/1 ARM3.25%3.01%
30 yr refi4.17%4.06%
15 yr refi3.21%3.09%
Rate data provided
by Bankrate.com
View rates in your area
Find personalized rates:
Index Last Change % Change
Dow 17,778.15 421.28 2.43%
Nasdaq 4,748.40 104.09 2.24%
S&P 500 2,061.23 48.34 2.40%
Treasuries 2.20 0.06 2.61%
Data as of 11:42pm ET
Company Price Change % Change
Bank of America Corp... 17.53 0.27 1.56%
Apple Inc 112.65 3.24 2.96%
Oracle Corp 45.35 4.19 10.18%
General Electric Co 25.14 0.71 2.91%
Microsoft Corp 47.52 1.78 3.89%
Data as of 4:03pm ET


Russia's economic turmoil has already spread to companies in the West and many brands are bracing for a bigger blow to earnings. More

The shale boom has been a blessing to Texas, but tumbling oil prices are casting a shadow over the state. More

Portland's mayor says the city will create new rules, eventually allowing Uber to operate there. More

With two recent IPOs and a digitally-inclined audience of entrepreneurs, non-traditional financing could finally get its big break. More

Payday lenders are spending millions of dollars in Washington in an attempt to get powerful politicians on their side as a government crackdown on the industry heats up. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.