the fourth year

Bull markets often follow a predictable pattern. In the first year of a rally, bulls tend to charge out of the gate: the Standard & Poor's 500-stock index has posted rip-snorting price gains of 38 percent, on average, in the initial year of bull markets since 1942, according to a recent study by S.& P.

This is typically followed by a more subdued second year, with the S.& P. 500 up around 12 percent, on average. And in the third year, the rally starts to sputter, with average gains of just 3 percent.

This is close to the way the last three years have unfolded - with the S.& P. up more than 26 percent in 2003, 9 percent in 2004 and 3 percent last year.

So how do stocks perform once bulls like this one enter their fourth year? The short answer is that they tend "to catch a second wind," said Sam Stovall, S.& P.'s chief investment strategist. Over the last 63 years, the S.& P. 500 has soared 14 percent, on average, in the fourth year of a bull market.