Navigating the Market Tides: A Look at Historical Bull and Bear Trends

The world of investing is often characterized by its cyclical nature, with periods of significant growth, known as bull markets, inevitably followed by periods of decline, or bear markets. Understanding the historical patterns of these market phases can provide valuable perspective for investors. A recent report from Mercer, titled "Bull & Bear Charts" as of June 2025, offers a deep dive into these trends for both the Australian All Ordinaries and the US S&P 500 indices.

A key term to understand is "bear market," which this report defines as a price decline of more than 20% from the peak, using month-end prices for calculation. The analysis presented uses this definition to distinguish between the two market climates.

The Australian All Ordinaries: A Story of Cycles

The chart for the Australian All Ordinaries, spanning from 1973 to 2025, reveals a market with distinct and powerful cycles.

• Average Bull Market: Lasts for 69 months with an average gain of 161%.

• Average Bear Market: Lasts for 14 months with an average loss of -37%.

Throughout its history, the Australian index has seen varied market behavior. For instance, there was a significant bull run of 73 months that resulted in a 278.6% gain. Another powerful bull market lasted 153 months, yielding a 278.4% return. On the flip side, the bear markets have also been impactful, such as a 21-month downturn that saw a -54.1% decline and a 16-month period with a -50.5% loss.

The US S&P 500: A Look at American Market History

The analysis of the US S&P 500 covers a longer period, from 1942 to 2025, and presents a different, though equally cyclical, picture.

•  Average Bull Market: Lasts for 54 months with an average gain of 156%.

• Average Bear Market: Lasts for 15 months with an average loss of -29%.

The S&P 500 has experienced some remarkably long periods of growth. One of the most notable was a 153-month bull market that produced a staggering 559.0% gain. Another major growth period lasted 166 months and resulted in a 413.6% increase. The bear markets, while shorter, have been sharp. For example, a 16-month bear market led to a -52.6% decline, and a 25-month downturn resulted in a -46.3% loss.

A Tale of Two Markets

While both indices show the classic bull/bear pattern, the characteristics are distinct. The average bull market in the Australian All Ordinaries has been longer (69 months vs. 54 months) and has had a slightly higher average percentage gain (161% vs. 156%) compared to the US S&P 500. Conversely, the average bear market in Australia has been slightly shorter (14 months vs. 15 months) but more severe in its average decline (-37% vs. -29%).

It is crucial to remember the disclaimer provided in the report: "Past performance is not an indicator of future performance". These historical charts offer a valuable look into the past, but they do not guarantee future results. They serve as a reminder that market fluctuations are normal and that both growth and decline are inherent parts of the investment landscape.

Reference

Mercer. (2025). Bull & bear charts. Mercer Investments (Australia) Limited.

Why not book an appointment with a friendly member of our Adelaide-based advice team? We can help you understand how historical market trends may affect your investments and work with you to develop a tax-effective strategy for both pre- and post-retirement—explained in clear, simple terms.

General Advice Warning:

The information on this website is intended to be general in nature and is not personal financial product advice. It does not take into account your objectives, financial situation or needs. Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your objectives, financial situation and needs. In particular, you should seek independent financial advice and read the relevant product disclosure statement (PDS) or other offer document prior to making an investment decision in relation to a financial product.