Don’t Fear The Bear, The Bull Has More Stamina

Don’t Fear The Bear, The Bull Has More Stamina
Theodora Lee Joseph, CFA

4 months ago2 mins

Bear markets aren’t really something to be feared, at least, not if you’re a long-term investor. They can seem terrible when you lose 20% or more of your investments in a blink of an eye, but the good news is that they don’t last nearly as long as recoveries. Since the 1950s, the average bear market has lasted 12 months and resulted in a 33% market loss. The average bull market, on the other hand, has lasted 67 months and resulted in a 265% market gain.

If you find you’re often tempted to exit the market as it falls, well then, you’ll need to make sure you’re highly adept at calling the bottom. After all, you wouldn’t want to miss out on the recovery. Returns are often the strongest after the steepest declines: for example, in the first year after the five biggest bear markets since 1929, markets saw an average gain of 70.9%.

So rather than moonlighting as a seer and trying to time the market, you may find it more profitable to simply stay invested. Market ups and downs can be nerve-wracking, but if you zoom out and think about the long term, it’s fairly reassuring. Over the past 30 years, the S&P 500 has delivered an average annual return of nearly 10%, after all.

So, you can put your crystal ball away for now, and instead take advantage of the fact that interest rates are at two-decade highs: consider stashing a bit of money into an interest-yielding account, so you’re ready to deploy it during a dip. But this bull-bear cycle isn’t just true for the S&P 500, and the US isn’t the only place delivering strong returns. In fact, three-quarters of the top-returning stocks each year were from companies based on foreign soil. So if you’re looking for stocks that can appreciate by 10x or more, Indian stocks are worth a look.



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Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.

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