There are three
equity bear market periods that stand out though because bonds delivered larger gains, including the 2007, 2000, and the 1980 bear market.
Not exact matches
I've also marked on the graph the level that yields would need to fall to in order to match the total return earned during prior
equity bear -
market periods.
Considering that
equity investments can easily underperform bonds over
periods as long as 10 years and that
bear markets can last many years, investors must have a healthy fear of
market volatility and budget their risk appropriately.
To recap, Vitaliy's thesis is that
equity markets are characterized by
periods of valuation expansion («bull
market») and contraction («
bear market» or «sideways
market»).
As an investor uninterested in owning
equities, it's a rather uneventful and
boring period of the
market cycle.
I've also marked on the graph the level that yields would need to fall to in order to match the total return earned during prior
equity bear -
market periods.