Looking back at the S&P 500 bear markets over the last fifty years or so, an interesting observation springs out of the data:
We looked at the % of up days versus the % of down days in each bull and bear market: the chart shows the difference (% up less % down days).
- Each cycle has seen a greater bias towards up days and away from down days (that applies for bull and bear markets).
- Bull markets have become increasingly bullish and bear markets decreasingly bearish. So much that, in fact, in the 2007/9 bear market (the biggest since the 1930s) there were “just” 49% down days (versus 47% up days) – a brutal bear market and the market fell less than half the time.
- Bear markets with, on balance, fewer down days increase the anxiety and pain of not being in the market, particularly so if the market is flat/up more than it is down.
Just a useful reminder that bear markets increasingly come in “batch form” i.e. with sudden, large declines interspersed with modest gains/stability rather than in a continuous and even process of declines outnumbering gains…. bear markets seem to be progressively less bearish.
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