Oliver’s Insights – There’s a bear in there – what drives mild versus deep bear markets

Oliver’s Insights – There’s a bear in there – what drives mild versus deep bear markets

Following the slide into bear market territory (defined as a 20% or great fall) by the Australian ASX 200 index last week, the attached note takes a look at past Australian bear markets since 1900 and what determines whether a bear market is mild as opposed to long and deep.

The key points are as follows:

  • Historically, bear markets in Australian shares have seen an average fall of 33% over 18 months.
  • However, this masks a huge range. 65% of bear markets have seen gains over the 12 months following an initial 20% decline in share prices.
  • Factors involved in whether bear markets are mild or deep include whether there is a recession, whether earnings slump and whether the market was overvalued or not prior to the start of the bear market.
  • Our view remains that a recession is unlikely, that earnings growth will be soft but is not about to implode and valuations are not stretched.

Download full report



Not sure how much life insurance you need ?

Try Our Quick and Easy Life Insurance Calculator.

We compare products from the following companies