Let the truth be known: Only one of the authors of this article has really seen a long, drawn-out growler of a bear market. He lived through it professionally and it's not a fond memory. The other was only a kid at the time and wasn't earning a living as an investment advisor. But considering the wild ride we've been on for the first three-quarters of this year, we'll give you our insights as to whether we have a weary bull or an angry bear on our hands.

At this point, even Fed Chairman Alan Greenspan doesn't deny the fact that we're dealing with a new economy, or that rapid advances in technology have fueled the greatest productivity surge since the industrial revolution.

Is the ride over?

This productivity surge has sustained perhaps the greatest bull market ever. But it's time to ask the question: Is the stock market running out of gas or merely making a pit stop to refuel?

Aside from slight breathers in 1990, 1994 and mid-1998, we've seen an incredible 10-year run in stocks. That spectacular surge has been a product of robust corporate earnings. Investors had gotten used to strong earnings and, as a result, mindlessly bid up the prices of many stocks in anticipation of even better earnings to come. It's taken almost all of this year for stock valuations to get back in line with earnings realities, and we may still have a little way to go.

Troubling signs

The problem for the market is that we no longer have the "Goldilocks" economy of the last few years, in which all the indicators -- robust economic growth, low inflation, lower interest rates and low unemployment -- were "just right:" . Now, we have soaring energy prices, a weak euro that lowers earnings of multinational companies, and the possibility of a hard landing from a Fed-induced economic slowdown.

We've entered a period of economic uncertainty. We should be experiencing a soft landing as the economy shows signs of slowing down. But wide swings in energy prices and currencies make economic forecasting difficult.

Priorities shifting

We do know that investors' attitudes have changed. In 1999, investors demanded growth and were willing to pay almost any price to get it. But when they saw they could get burned by the dot-com darlings, they reverted to the traditional measures of evaluating stocks -- earnings and free cash flow.

With profits back in the spotlight, companies are focused on increasing earnings per share (EPS). Some are forgoing dividends to reinvest more in their businesses, or buying back their own shares to reduce the number of shares outstanding and boost EPS.

Overall, we believe it's premature to declare the bull dead. Volatility now rules, and stocks are rewarded or punished based on quarterly earnings performance.

Eventually, stock market returns should revert to their historical norms of about 10% a year. This should lead to better performance for the less glamorous companies that have been ignored during the last few years.

Richard J. Alphonso, JD, CPA/PFS, M.S.T., and Steven A. Estrin, MBA, are president and chairman respectively, of The Financial Advisory Group, Inc., in Houston. The Financial Advisory Group provides personalized fee-only financial planning, investment management and business consulting services.