What Bull and Bear Markets Reveal About Long-Term Investing

Riding the Waves: Bull vs Bear Markets Explained

Every investor loves a bull market, but bear markets are an unavoidable part of the journey. According to Mercer's Bull & Bear Charts – March 2025 report, understanding how these cycles play out can help investors build resilience, stay calm during downturns, and stay focused on long-term gains.

Let’s break down what this 2025 report reveals about market behavior in Australia and the U.S., and what that means for investors today.

🇦🇺 Australian All Ordinaries: Bulls Roar Louder and Longer

Mercer’s historical analysis of the Australian All Ordinaries Index paints a reassuring picture for long-term investors.

Bull Markets:

• Longest bull run: 153 months, delivering 278.4%

• Largest gain: 386.7% over 66 months

• Average bull market lasted 69 months with an average return of 159%

Bear Markets:

• Most severe decline: -54.1% over 21 months

• Typical downturn: around -37%, lasting about 14 months

Despite some sharp corrections — including drops of over 50% — the bull phases consistently outperformed the bears both in size and duration​.

Key Lesson: In Australia, bulls typically outlast bears by nearly 5 years on average, and the upside significantly outweighs the downside over time.

🇺🇸 S&P 500: Resilience Amid Global Storms

Turning to the U.S. S&P 500, the data tells a similarly compelling story. Even through recessions, tech bubbles, and pandemics, U.S. equities have steadily delivered long-term returns.

 Bull Markets:

• Strongest rally: 559.0% over 153 months

• Average bull market duration: 54 months

• Average gain: 155%

Bear Markets:

• Largest crash: -52.6% over 16 months

• Average duration: 15 months, with average declines of -30%

Some bear phases were brief (as short as 3 months), while others — like the Global Financial Crisis — hit harder and lasted longer​.

 Key Lesson: The U.S. market showcases immense recovery potential. Even after harsh corrections, the index consistently climbs higher in the long run.

 What This Means for Investors

So what should everyday investors take away from all of this?

• Stay the Course

Trying to time the market — jumping in and out to dodge bear markets — is incredibly difficult. History shows that staying invested through downturns often leads to better outcomes than panicking during volatility.

• Diversify Smartly

While equities show long-term strength, incorporating bonds and other asset classes can help manage risk during bear markets.

• Think Long-Term

Bull markets are longer, stronger, and more frequent than bear markets. Keeping a long-term mindset helps investors stay grounded when short-term performance dips.

Final Thoughts

Mercer's March 2025 charts remind us of a simple truth: markets rise and fall — but historically, they rise more often, and for longer. Whether you're in Australia or investing globally, the path to wealth is rarely straight, but it's well worth the journey.

So, if you're staring down a bear market, just remember — this too shall pass.

Source:
Mercer (2025). Bull & Bear Charts – March 2025. Based on data from Bloomberg and Mercer analysis​

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