Investor Education: Stay invested
Bull markets versus Bear markets
To pursue the greater return potential of stocks, it makes more sense to stay committed to an investment plan rather than try to guess the best time to be in the market. Over the past 72 years, bull markets have lasted longer (49 months on average) than bear markets (13 months on average) and have more than made up for the periodic market declines. Bull markets have begun during economic recessions and expansions and at all levels of rates. And while it is impossible to predict when a bull market will begin, it is possible to miss one by waiting on the sidelines.
Bull markets Bear markets E Expansions R Recessions Federal funds rate
Federal funds rate
600% R 550% 500% 450% 400% 350% 300% 250% 200% 150% 100% 50%
E
R
E
R ER
E
91 months
401%
Percent change of the S&P 500 Index for each bull and bear market since 1949
R
E
R
E
RE R
19 months
59%
14 months
39%
43 months
90%
26 months
52%
30 months
76%
27 months
86%
33 months
87%
E
R
E
61 months
280%
30 months
72%
Federal funds rate is the interest rate at which private banks lend money for overnight loans. The Fed generally raises the target federal funds rate to slow economic growth, and lowers the rate to facilitate growth.
R
E
R
E
118 months
526%
61 months
108%
26 months
94%
R 24% 22% 20% 18%
111 16% months
302% 14%
12% 10% 8% 6% 4% 2%
YEARS '49 '50 '51 '52 '53 '54 '55 '56 '57 '58 '59 '60 '61 '62 '63 '64 '65 '66 '67 '68 '69 '70 '71 '72 '73 '74 '75 '76 '77 '78 '79 '80 '81 '82 '83 '84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20
-50% -100% -150%
-14% -8% -22% -16%
17
15
6
8
months months months months
-29%
19 months
-43%
21 months
-14%
14 months
-17%
20 months
-30% -15%
3
5
months months
-45%
25 months
-51% -16%
16
5
months months
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