“Investors who like to look at the proverbial trees see lots of them at the moment: the Federal Reserve’s interest-rate meeting next week, second-quarter earnings, economic growth and terrorism,” writes E.S. Browning in today’s Wall Street Journal.

“But there also is a forest out there — the historical tendency of bull markets to post strong gains in the first half of their existence before slackening considerably in the second half. That suggests the current one may have trouble duplicating the strong gains realized through the end of last year.”

“Since October 2002, the Dow Jones Industrial Average has risen nearly 43%, while the Nasdaq Composite Index has jumped nearly 80%. But all those gains had occurred by the end of last year. This year, the major indexes have gone nowhere, which is just about what past experience would have predicted. So regardless of what happens with all the short-term issues on which most analysts are fixated, market historians say, there is a good chance that future stock gains will be harder to come by than they were last year.”

” ‘We could go up another 5% or 10% and make a new high, but most of the gains were in 2003,’ says research analyst Sam Burns at Ned Davis Research in Venice, Fla. ‘Those were pretty good gains, but that was probably the best of it, and we are likely to see more-modest gains now.’ “

“Mr. Burns believes the bull market may be more than halfway over — seemingly an odd comment to anyone who lived through the bull market of the 1990s, which lasted for more than 10 years and involved a gain of nearly 400% for the industrial average. No one knows for sure, of course, but most analysts view the 1990s bull market as a once-in-a-lifetime experience; indeed, it was the century’s longest. The typical bull market is much shorter and a lot less sweet, and that is the kind that many analysts think is under way now.”

“On average, according to a study by Ned Davis, bull markets since 1900 have lasted about 718 days — just shy of two years. The shortest was two months, in 1932. The two-year anniversary of this bull market will be Oct. 9. It even is possible, Mr. Burns says, that stock indexes already saw their highs in February, levels to which perhaps they won’t return before we endure a new bear market.”

“Since 1929, bull markets have tended to have their strongest gains early and then slow down. The Dow industrials have tended to rise 43% in the first half of a bull market and only 16% in the second half. In other words, history suggests stocks still may have some room to rise. But, historically, what analysts call the “easy money” tends to be made early, not late. That was another way in which the long 1990s bull market was different; its strongest period was its second half.”

“The stock market now seems to be running true to that tendency to rise less rapidly as the bull market ages. Last week, in light trading, the industrials rose a scant 6.31 points, or 0.06%, to 10416.41, nudged into the plus column by an advance of 38.89 points, or 0.37%, Friday. This year, the industrial average is down just barely — 0.4%.”