Bulls, Bears & Long Term Benefits of Stock Investing

Dimensional, May 2022

Stock returns are volatile, but nearly a century of bull and bear markets shows that the good times have outshined the bad times.

• From 1926 through 2021, the S&P 500 Index experienced 17 bear markets, or a fall of at least 20% from a previous peak. The declines ranged from —21% to —80% across an average length of around 10 months.

• On the upside, there were 18 bull markets, or gains of at least 20% from a previous trough. They averaged 55 months in length, and advances ranged from 21% to 936%.

• When the bull and bear markets are viewed together, it’s clear equities have rewarded disciplined investors.