 |
Magnitudes of Bull and Bear Markets
Since 1950, there have been a number of bear markets, defined as a drop of 20% or more from the market's previous high, as measured by the performance of the S&P 500 index. During these bear markets, stocks fell an average of 33% and gained an average of 151% in the subsequent bull markets.
|
 |
Bear Markets and Market Corrections, January 1950 to December 2024
This table represents the size and duration of all corrections, bear markets, and market rebounds that occurred in the U.S. stock market between January 1, 1950, and December 31, 2024. Generally speaking, a correction is a decline of 10% to 19.9% from peak to trough. A bear market is a decline of more than 19.9% from peak to trough, and a rebound is the gain from one trough to the next peak.
|
|
U.S. Stock Market and Economic Contractions
This chart indicates the changes in the performance of the U.S. stock market (based on the total returns of the S&P 500) before, during, and after each of the 10 recognized economic contractions that have occurred since 1950. As a general rule, contractions were approximately associated with market declines while the market tended to rise during periods of expansion.
|
|
S&P 500 Sector Ranks -- 2010 to 2024
This table illustrates that no one sector of the S&P 500 has consistently dominated the index in terms of its performance. Some sectors, like Information Technology, have tended to have more extreme swings, performing near the top of the index or near the bottom of the index in many years. Others, like Consumer Discretionary, have tended to finish many years in the middle of the pack.
|
|
Equity Performance During Expansionary and Restrictive Monetary Policy
This chart suggests that during periods of restrictive monetary policy, equities as measured by the S&P 500 index have tended to perform more poorly than during periods of expansionary monetary policy.
|
|
Assets Take Turns as Top Performers
According to the performance of the relevant market indexes, no asset class consistently outperformed the others over the 10-year period ended December 31, 2024. Any given index could be the strongest performer in one year and the poorest in another.
|
|
Bonds Might Have Helped
Portfolios that were composed of a mix of stocks and bonds might have fared better than all-stock portfolios during the 2007 to 2009 bear market.
|
