Bull vs Bear Markets

Bull vs Bear Markets
Bull vs Bear Markets - Australian ASX - Point B Planning

Bull vs Bear Markets - Looking back 42 years

2 min read

Key takeaways

  • What is a bull market
  • What is a bear market
  • Performance over the last 42 years

Those who have visited the New York Stock Exchange in Manhattan, you may have seen a bronze sculptured animal known as the ‘Charging Bull’. This statue is an iconic figure within the investment universe, as it represents the bull market. A bull market is a good outcome and is typically defined as an increase in stocks of more than 20%. Bull markets tend to occur when the economy is performing well. Low unemployment, low inflation, high business, and consumer confidence are some of the main drivers of a strong-performing bull market. We don’t have to look very far back to see the longest-running bull market in history, 2009 – 2019.

The opposite of a bull market is a bear market. When stock values decrease by more than 20%. Generally, this is not a good outcome and is usually a sign of a fledging economy. High inflation rates, high unemployment and low business and consumer confidence, all contribute to driving a slower economy and are typical characteristics of a bear market.

To provide some context, although markets may alternate between bull and bear markets. In the last 42 years, there have been approximately 4 bear years and a total of 38 bull years. With the average bear period running 0.9 years on average and the average bull period running 7.7 years. Although the market may change in value, and phases may switch in between the bull and bear markets. The overall performance of the markets over the last 42 years has been significantly strong, with bull markets dominating and sustaining a far greater period in comparison to the bear markets.

If you would like to know more about investment trends and markets, please feel free to contact our financial advisors who service the Yarraville, Seddon, Altona, and Williamstown areas.

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