Oliver's Insights

Shane Oliver Head Economist at AMP discusses what drives mild versus deep bear markets.

Key Points

  • 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.


To view the full article click here Australian bear markets.