Equity markets go thru bull and bear markets every few years or so. While bull markets are great and makes every investor a genius, bear markets offer excellent opportunities to build wealth for long-term investors. This is because unlike in bull markets, stocks are cheaper and investors can pick up more of them for the same amount of investment in bear markets. Of course, investing new cash when everything is collapsing is not easy to say the least. It takes courage and deep faith in stocks to jump into stocks when everyone else is bailing like the world is about to end. However investors that grab equities on the cheap and hold tight until the market turns and soars can earn astonishing returns.

The following chart shows that stocks have grown over the long run despite going thru many market moving negative events over the years:

Click to enlarge

Source: Braving bear markets: 5 lessons from seasoned investors, Capital Group

Related ETFs:

• SPDR S&P 500 ETF Trust (SPY)

Disclosure: No positions

Most of the exchange-listed foreign banks trading on the US exchanges are down so far this year in line with the overall market conditions in the equity markets. As expected, European banks are in the deep red while emerging market banks especially in Latin America have performed very well. European lender Credit Suisse(CS) is the worst performer with a loss of nearly 47%. Brazilian banks are some of the top performers with Itau Unibanco(ITUB) gaining over 35% year-to-date. In general, Brazilian equities are on the upswing with investors expecting major changes after the general elections in October this year. The last time the equity market had a great bull run was when Lula was President.

The following table shows the year-to-date returns of foreign bank stocks:

Note: The returns noted above are excluding dividends

Source: BNY Mellon

Investors can avoid European banks since they face major headwinds both due to internal issues and external issues such as the Ukraine war for example. Emerging market banks offer better opportunities than European banks. For instance, Colombian or Chilean or Indian banks have better growth potential than British banks which are mired in problems ranging from the most recent Brexit drama and potential recession in the country.

Disclosure: Long BCH, CIB, ITUB, BBD, BBVA, SAN and LYG