S&P 500 Index Bull and Bear Markets Since 1966

US equity markets were up big yesterday. However we are still in a bear market and after weeks of down days it was more of a relief rally. Moreover volume was lower than average for a few stocks I looked at. Stocks going up on low volumes is not a strong indicator of the strength of the rally. Even if we ignore the rally yesterday and take a high-level overview of the markets, bear markets do not last forever, Historically stocks tend to go higher in the long term as measured in years and decades. While stocks can be volatile in the short-term, ultimately volatility subside and stocks restart their upward trend.

With that said, a recent article at Schwab noted that bear markets tend to be shorter than bull markets based on their research since the late 60s. From the article:

Historically, the stock market has always returned to its previous peak after a bear market, usually within a few years. The Schwab Center for Financial Research looked at both bull and bear markets for the S&P 500® Index going back to the late ’60s and found that the average bull ran for about six years, while the average bear market lasted roughly 15 months. The longest bear market lasted about two and a half years. The shortest was the pandemic-fueled bear market in early 2020, which lasted a mere 33 days.

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Source: Bear Market: Now What?, Schwab

While it is impossible to predict when the current bear market will end, it is a wise idea to monitor the market and take advantage of cheaper prices. One way to gain exposure to the boarder market is via the SPDR S&P 500 ETF (SPY). However for investors that already own individual stocks, a smart strategy is to follow the Dollar Cost Averaging model and nibble when markets decline heavily.

Below are a few stocks that investors can consider for further research and consider for potential investment:

  • General Mills Inc (GIS)
  • Lear Corp (LEA)
  • Canadian Pacific Railway Ltd(CP)
  • Edison International (EIX)
  • General Dynamics Corporation (GD)
  • Bank of Hawaii Corporation (BOH)
  • Cullen/Frost Bankers, Inc. (CFR)
  • TELUS Corp (TU)
  • Amphenol Corp (APH)

Disclosure: Long GIS

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