The End Game

Where do stocks go from here?

Historically, bear markets fall into 3 types, ‘structural’, ‘cyclical’ and ‘event driven.’

To get a sense of how much markets are likely to fall. and for how long, a bear market framework published in Share Despair (2002) can give us a reference.


Triggered by structural imbalances and financial bubble: Very often there is a ‘price’ shock such as deflation that follows.


Typically a function of rising interest rates, impending recessions and falls in profits. They are a function of the economic cycle.

Event Driven

Triggered by a one-off ‘shock’ that does not lead to domestic recession (such as a war, Oil price shock. EM crisis or technical market dislocation).

How long can it last?

  • Structural bears on average drop 57% and last 42 months.
  • Cyclical bears on average drop 31% and last 27 months.
  • Event-driven bear markets lose 29% and last 15 months.

By Terry Grennon

Asset Allocation Strategist