Line chart showing the growth of $10,000 based on S&P 500 Index total returns starting in January 1926 through June 2024. The chart shows performance of bear markets vs bull markets, demonstrating that over the long term the S&P 500 Index moves higher despite periodic bear markets. Bull markets tend to be longer in duration than bear markets, with a higher average return than the average loss during a bear market. As of June 2024, the average bull market has lasted 4.9 years with an average return of 220.7%. As of June 2024, the average bear market has lasted 1.5 years with an average loss of 29.8%.
Sources: Bloomberg, © Morningstar Direct, All Rights Reserved1, and Wells Fargo Investment Institute. Monthly data from January 1, 1926, to June 30, 2024. Averages do not include the current market cycle. For illustrative purposes only. The S&P 500 Index is a market capitalization-weighted index composed of 500 stocks generally considered representative of the U.S. stock market. Index returns do not represent investment performance or the results of actual trading. Index returns represent general market results, assume the reinvestment of dividends and other distributions, and do not reflect deduction for fees, expenses or taxes applicable to an actual investment. An index is unmanaged and not available for direct investment. Past performance is no guarantee of future results. There is no certainty that U.S. markets will continue to show resilience despite crisis events. Investing in stocks involves risk and their returns and risk levels can vary depending on prevailing market and economic conditions. There is no guarantee equity markets will perform similarly during other periods of uncertainty. All investing involves risk including the possible loss of principal.
1 All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.
Key Takeaways
- Bear markets, while disconcerting in real time, have been merely short-term speed bumps to sizable long-term equity returns.
- Those long-term investors that take advantage of bear markets to acquire quality assets at reduced prices are better positioned to benefit from the bull market that inevitably follows.