Bull & Bear Markets since 1970

Since making new highs at the start of the year, global stock markets, including the S&P500 Index, have fallen over 20% this year, fulfilling the technical definition of a bear market.

Why have stock markets fallen? Well, first the combined impacts of QE, fiscal spending, and commodity supply-chain disruptions due to the war in Ukraine created a perfect storm for inflation. And, as the rises in energy and food prices have proven to be sticky, central banks like the US Federal Reserve and the Bank of England have had to raise interest rates several times. Tighter financial conditions, in turn, have hit stock markets.

Stock markets are effective discounting mechanisms, however, and investors are already looking ahead to a possible peak in interest rates in the first half of 2023. This Bull & Bear analysis from Embark Investments illustrates that bear markets are typically much shorter than bull markets, and therefore provides a timely reminder of the benefits of ‘staying the course’.

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