Investing 101

Bulls markets outrun bears – every time

When stock markets tumbled into a steep correction in early 2009, investors found it hard to “stay the course.” Many moved to the very safest investment vehicles. Over the nine months of the “bear market,” the Canadian stock benchmark, the S&P/TSX, fell 43%. However, governments took aggressive actions to revive the North American economy. A two-year rally followed, with the market up 84% over 25 months. Many investors remained on the sidelines, missing the rally.

Market analysts point out that the rebound should have been expected. That’s because, on average, bear markets in Canada last nine months, while the average bull market lasts for 45 months. Even more telling is the fact that the average bear-market decline is 28% but rises 123% on average in bull markets. To learn more about bull and bear markets click here.

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