Understandably, the recent correction on world sharemarkets had some investors asking themselves and their advisers: "Is the market rebound over so quickly?"

It is an interesting exercise to look at what has occurred on markets in the past.

Statistics from Bloomberg and AMP Capital Investors show that the Australian market has experienced 15 cyclical bull markets in Australia since 1894 – excluding the rebound beginning in March this year.

The total bull market gains of the All Ordinaries during these bull markets ranged from a high of 253% between March and June 1894 to a low of 42% between November 1960 and February 1964.

"Since 1950, the typical cyclical bull market in Australian shares last four years and saw average gains of 132%," notes Shane Oliver, head of investment strategy and chief investment Economist of AMP Capital Investors.

To date, the All Ordinaries has risen by about 56% since March.

"It would be unusual for a cyclical recovery in shares to end when leading economic indicators are still rising, [corporate] earnings are still recovering from depressed levels, interest rates are low, and so many investors are sitting on cash," Oliver comments.

"As such, our assessment is that it is still early days in the cyclical recovery. In other words, we are seeing a correction in a still rising trend, and not the resumption of the bear market."

Oliver also makes these points:

• It is normal for recovering share prices to "get ahead of themselves every so often and have a pull back". 
• Analysts' estimates for global corporate earnings are beginning to be revised upwards.
• Still low interest rates make grossed-up share dividends (after allowing for franking credits) comparatively attractive. 
• "Considerable skepticism [remains] about the sustainability and strength" of the recovery. This global skepticism was adversely affecting share prices at this stage.

Smart Investing often makes the point that attempts to time the sharemarket – trying to pick the best times to buy or sell – rarely succeed. It is a truly a game of chance that will almost certainly fail, even for highly experienced investors.

A key message for investors in the prevailing investment environment is that trying to call when the market recovery may end is likely to be a waste of time – and money.