Bull _ Bear Markets TSE 300

Document Sample
Bull _ Bear Markets TSE 300 Powered By Docstoc
					                                                                                                       BULL & BEAR
                                                                                                       MARKETS
                                                                                                         S&P/TSX INDEX to June 2003


                       460
                                                                                                     288%
                       300                                                                          81 months               253%
                                                                                                                        61 months                        203%
% Change (log scale)




                                                                                                                                                        90 months
                       220
                       140                             81%                        82%                                                                                  109%
                                      85%
                                                                              40 months                                                  44%                           24 mos
                                      48 mos        43 months        63%
                       100                                        32 months                                                             25 mos


                       40                                                                                                                                                      16% 8%
                                                                                                                                                                              6 mos 9 mos

                        0
                                                              -15%
                                                -17%                                                                                           -20%                                  -21%
                             -26%                            8 months      -25%                                                      -25%
                                               6 months                                                                                                             -28%             6 mos
                       -30   17 mos                                     13 months        -35%                                       4 months
                                                                                                                                               10 mos
                                                                                                                                                                    4 mos
                                                                                                                 -39%
                                                                                        11 months                                                                            -38%
                                                                                                                12 months
                                                                                                                                                                            13 mos
                       -60
                         56            60              64          68             72          76           80         84             88            92        96        00 Jun 03


Source: Mackenzie Financial (Datastream) reprinted June 2003
                                                                BULL & BEAR
                                                                MARKETS
                                                                 S&P/TSX INDEX to June 2003


THE RISKS AND REWARDS OF INVESTING
•   This chart represents the bull and bear markets in the S&P/TSX since 1956. All bars above the line are bull markets; all
    bars below are bear markets.
•   For the purposes of this illustration, a bull (bear) market is defined as a positive (negative) move greater than 15% that
    lasts at least 3 months.
•   The first bar represents a bear market which, at its lowest point, dropped to -26% and lasted 17 months. This was
    followed by a bull market rising 85% and lasting 48 months.
•   Since 1956 there have been 10 bull markets and 11 bear markets. As can be seen from the chart, bull markets typically
    last longer and provide a more significant percentage change.
•   Bear markets during this period have averaged -26% and lasted only 10 months. Bull markets during this period have
    averaged 122% and lasted 45 months. This is the reward for accepting the risk of bear markets.


INVESTOR BEHAVIOUR
•   According to the chart, markets spend more time in positive territory (bull) than negative (bear).
•   Bull markets are, on average, longer and more intense, providing a more significant percentage change.
•   The bear markets are, on average, more brief, and yet engender fear. It is during these periods that we should be investing.
•   Investor discipline during the bear markets is critical.

				
DOCUMENT INFO
Shared By:
Categories:
Stats:
views:21
posted:4/8/2010
language:English
pages:2