Answer: 10+1 or about once every 6 years.

• It was 10 until yesterday when the S&P 500 index was more than 20% below its previous high. 

From Invesco: 

Note: The number in bold is the duration (in months) of the bull/bear market. The %age is the rise or decline in stocks over that period. Bull in green and bear in red. 

Questions

• What time period had the best performing bull market? the worst bear market? 
• How do bull and bear markets compare when it comes to their duration and the change in stock prices? 
  • Which tend to have longer durations? 
  • Which tend to have a greater impact on stock prices? 
• Your friend who just started investing and says "I better get out of the market because I think that prices are going to keep going down for a very long time." Using evidence from the chart, agree or disagree with his desire to sell his stock. Focus on the typical length of a bear market in your answer. 
• Do investors who hold their stocks through bear markets typically make their money back in bull markets?
  • For example, if you owned $100 in stock in the bear market of 1960, the value would have declined 27.97% so you would have about $72.
  • The bull market that came next saw your $72 in stock increase by 79.78% so you would have had $129
    • Profit = $72 * .7978 = $57
    • Value at beginning of bull market = $72
    • Total =$129
  • Since $129 is greater than your investment at the beginning of the bear market of $100, you would have made money by holding through the bear AND bull market from 1960-1965. 

Lots more great math problems here with percentages as you could complete this same calculation for every one of the 10 bull and bear market pairs listed above.  

Click here for the ready-to-go slides for this Question of the Day that you can use in your classroom.

Behind the numbers (CNN; 3/10/20):

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.