While market volatility causes uncertainty, its occurrence is actually a certainty. This series of articles provides insight to help put volatility into perspective.
Investors tend to worry about bear markets – but is that fear warranted? All markets go up and down to varying degrees, but the historical trend of equity markets has been up as economic expansion and technological developments work together to drive stock valuations higher.
The Facts
Bull market
Bear market
A prolonged period in which market prices move upwards over an extended period of time.
Average length: 45.1 months
Average gain: 111.8%
A prolonged period in which market prices move downwards over an extended period of time.
Average length: 8.6 months
Average drop: -24.7%
Throughout history, bull markets are, on average, longer and more intense than bear markets. Not only do they last longer, their percentage swings are more significant. In the end, the results speak for themselves. Since 1956, a C$250 investment into the S&P/TSX Composite Total Return Index would have grown to C$49,204 by the end of December 2018.
Source: Bloomberg, S&P/TSX Composite Total Return Index, February 1, 1956-December 31, 2018. Please note this example is for illustrative purposes only and is not meant to provide investment advice. You cannot invest directly in an index. The investment amount and fund price referenced are in Canadian dollars.
A financial advisor can help you understand current market events and help you understand how they may impact your investments and your plan. If you’re concerned about market volatility, contact your financial advisor.
The commentaries contained herein are provided as a general source of information and should not be considered personal investment or tax advice. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change investment decisions arising from the use or reliance on the information contained here.
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Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
