No one enjoys a bear market – usually defined as a market decline of 20% or more over two months.
But looking back through the history of both the Canadian and U.S. stock markets, it’s clear that on average, bull markets – an increase of 50% or more in the value of the stock market – last longer and more than make up for losses incurred during bear markets.
This is one more reason to focus on the long term and stay invested – even when the markets are going through a rough patch.
Bull and bear markets in Canada since 1955
Return (%)
Average bull market duration: 85 months
Average bull market return: 209%
Average bear market duration: 12 months
Average bear market return: -33%
Source: Bloomberg, as at December 31, 2019.
Bull and bear markets in the U.S. since 1950
Return (%)
Average bull market duration: 105 months
Average bull market return: 335%
Average bear market duration: 18 months
Average bear market return: -38%
Source: Bloomberg, as at December 31, 2019.
Cumulative return – The total amount an investment has gained or lost over a specified period of time.
Nothing in this document should be considered as investment advice. Always consult with your investment advisor prior to making an investment decision. Commissions, trailing commissions, management fees, brokerage fees and expenses all may be associated with mutual fund investments, including investments in exchange-traded series of mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.
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