Apr 17, 2020 | EWAN ROSIE

Who wins, the bull or the bear?

Published: 17th April 2020


You might be thinking this is a bizarre question to be asking right now! Or perhaps you’ve guessed we’re talking about bull and bear stock markets.

It’s likely that you will have heard/seen the phrase ‘bear market’ a lot recently – on the news, in the press or on social media.

What do these phrases mean?

Although there is no strict definition of either of these phrases, a bear market is generally when prices are falling and a bull market is when they are rising. Over time, market commentary has labelled a ‘bear market’ as a stock market reduction of 20% or more; and a ‘bull market’ as a price increase of 20% or more.

Why is this topical now?

Following the uncertainty COVID 19 has brought to the world, we’re currently experiencing a bear market.

At times like these people often fear that we’ll never get back to where we were before.

Let’s put that into context…

This useful chart from Vanguard helps put the current situation in perspective and provides some useful statistics. For reference the chart is based on the FTSE All Share Index, i.e. the UK stock market. It’s a total return index which includes reinvested dividends. This is an important point as often performance references to the FTSE are looking at changes of the index price, which does not include the dividends received from the underlying companies. Over the longer term this can have a huge impact.



Notice that there are far more red years on the chart than black. Since 1900 there’s been a total of 103 bull years, in comparison to only 16 bear years.

Also, the average length of time that a bear market lasts is 1.3 years – the average bull period is over 6 times greater at 7.9 years!

What about globally?

Generally speaking, at times of extreme uncertainty, most global stock markets tend to move in tandem but there will still be regional differences.

For instance, the US stock market as measured by the S&P 500 has risen 25% since it hit its recent market low on 24 March, whilst the UK market has increased just 14%. So according to the typical definitions of the bull and bear, the S&P 500 is already in a new bull market!

Whilst in China, where COVID 19 first broke out in January, the MSCI China Index saw a fall of just 18% and therefore hasn’t entered a bear market at all – that’s despite just issuing its worst economic growth figures (for the first quarter of 2020) in over three decades.

So, what’s our message?

Firstly, remember your portfolio is globally diversified and that diversification will help shield you from the worst of bear markets as and when they occur. Secondly, stick with your investments and be prepared to ride the bull and don’t get mauled by the grizzly bears!

Get in touch if you want to chat anything through when it comes to managing your money in challenging times.


Past performance can’t guarantee what investments will do in the future. The value of a portfolio can go down as well as up, so there’s a chance you’d get back less than you put in.

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