Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Register

16 October 2025

Home / 351

Every bear is different

The COVID-19 bear market hit severely, with the 34% fall in the S&P500 from 19 February 2020 to 23 March 2020, making it the quickest collapse in history. A bear market is usually defined as a 20% fall in a market index, and in March 2020, this took only 20 days.

Compared with other bears, however, there are reasons this bear market could be shorter. There has already been a strong recovery, although clearly this could be a bear market rally.

This short article compares the latest falls with previous bear markets, noting the one thing they all have in common – they end.

Consider the following chart of bear markets in the Australian All Ords Accumulation Index. 

  • Every bear market is different in terms of its speed and duration of falls, and how long they last.
  • In a bear market, panic selling of assets turns mark-to-market, or paper losses, into real losses.
  • The nature of each bear market is determined by the initial shock that triggered them (demand or supply side) and the quality of the policy response (weak versus strong).
  • The COVID-19 bear market was triggered by a supply side shock that quickly escalated into a profound demand side shock as health policies saw activity ‘stop’ during the lockdown phase of managing the rate of infection.
  • The policy response to this biological shock has been swift, dynamic and comprehensive. Central banks are providing unbound liquidity and fiscal policy is helping economies ride through to when infection rates begin to fall or a vaccine is close.
  • The nature of the COVID-19 biological shock helps explain the speed and depth of fall in the Australian share market compared to other bear markets.
  • The vigorous policy response and finite nature of the event suggests that this bear market will have more of a ‘U’ shape and be shorter in duration than other bear markets.

All Ordinaries Accumulation Index (100=cycle peak) in previous bear markets 

Source: Janus Henderson, does not include the subsequent rise in the All Ords of about 15% to end March 2020.

 

Frank Uhlenbruch is an Investment Strategist in the Janus Henderson Australian Fixed Interest Team. This article is general information and does not consider the circumstances of any investor.

 


 

Leave a Comment:

RELATED ARTICLES

Bear markets don't go paw-in-paw with recessions

Suddenly, the market cares if a company makes money (again)

Four stages of a typical bear market - but is this typical?

Firstlinks is sponsored by:
banner

Most viewed in recent weeks

Are LICs licked?

LICs are continuing to struggle with large discounts and frustrated investors are wondering whether it’s worth holding onto them. This explains why the next 6-12 months will be make or break for many LICs.

Retirement income expectations hit new highs

Younger Australians think they’ll need $100k a year in retirement - nearly double what current retirees spend. Expectations are rising fast, but are they realistic or just another case of lifestyle inflation?

5 charts every retiree must see…

Retirement can be daunting for Australians facing financial uncertainty. Understand your goals, longevity challenges, inflation impacts, market risks, and components of retirement income with these crucial charts.

Why super returns may be heading lower

Five mega trends point to risks of a more inflation prone and lower growth environment. This, along with rich market valuations, should constrain medium term superannuation returns to around 5% per annum.

The hidden property empire of Australia’s politicians

With rising home prices and falling affordability, political leaders preach reform. But asset disclosures show many are heavily invested in property - raising doubts about whose interests housing policy really protects.

Preparing for aged care

Whether for yourself or a family member, it’s never too early to start thinking about aged care. This looks at the best ways to plan ahead, as well as the changes coming to aged care from November 1 this year.

Latest Updates

Shares

Four best-ever charts for every adviser and investor

In any year since 1875, if you'd invested in the ASX, turned away and come back eight years later, your average return would be 120% with no negative periods. It's just one of the must-have stats that all investors should know.

Our experts on Jim Chalmers' super tax backdown

Labor has caved to pressure on key parts of the Division 296 tax, though also added some important nuances. Here are six experts’ views on the changes and what they mean for you.        

Superannuation

When you can withdraw your super

You can’t freely withdraw your super before 65. You need to meet certain legal conditions tied to your age, whether you’ve retired, or if you're using a transition to retirement option. 

Retirement

A national guide to concession entitlements

Navigating retirement concessions is unnecessarily complex. This outlines a new project to help older Australians find what they’re entitled to - quickly, clearly, and with less stress. 

Property

The psychology of REIT investing

Market shocks and rallies test every investor’s resolve. This explores practical strategies to stay grounded - resisting panic in downturns and FOMO in booms - while focusing on long-term returns. 

Fixed interest

Bonds are copping a bad rap

Bonds have had a tough few years and many investors are turning to other assets to diversify their portfolios. However, bonds can still play a valuable role as a source of income and risk mitigation.

Strategy

Is it time to fire the consultants?

The NSW government is cutting the use of consultants. Universities have also been criticized for relying on consultants as cover for restructuring plans. But are consultants really the problem they're made out to be?

Sponsors

Alliances

Site Map

About Firstlinks

© 2025 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.