Bulls and Bears
Between 1957 and 2020, there were ten bull markets and bear markets for Canadian stocks. Historically, bull markets have lasted longer than bear markets. The average bull market increase was 162% over an average duration of 66 months. Conversely, the average bear market decline was 29% over an average duration of 11 months.
Bull Markets are usually defined by periods where the economy is strengthening or already strong. During this period, stock prices are generally rising and investor sentiment is positive. These periods can last for months, or even years.
Bear Markets are defined by periods where stocks are declining in value. In the above illustration, the generally accepted measure of a market decline of 20% or more over any given period has been used. These periods tend to be shorter compared to Bull Markets.
Source: Bloomberg. Percentage market gain/loss based on monthly compounded returns from the S&P/TSX Composite Total Return Index from December 31, 1956 to December 31, 2020. Returns are calculated in Canadian currency. Assumes reinvestment of all income and no transaction costs or taxes. The terms bull market and bear market describe upward and downward market trends, respectively. Bull markets are movements in the stock market in which prices are rising and the consensus is that prices will continue moving upward. Bear markets are the opposite - stock prices are falling. In the above illustration, the generally accepted measure of a price increase or decline of 20% or more, respectively, over any given period, has been adopted.