History of Bull & Bear Markets
Behavioral science tells us current events have a greater impact on our perception and decisions than the past. In 2022, investors are faced with extreme uncertainty given record inflation and recession fears. The stock market is pricing in that uncertainty causing investors to wonder if this is the start of a long-term trend. Although stocks rise and fall in the short term, they’ve tended to reward investors over longer periods of time.
Looking at the history of S&P 500 since 1942, the average bull market lasted 4.4 years with an average cumulative total return of 154.9% while the average bear market (drop of 20% from peak) lasted 11.3 months with an average cumulative loss of -32.1%i.