US - Gains made during bull markets are significantly greater than the losses incurred during bear market cycles, meaning long term investors should hold steady during times of market turbulence, according to research by Putnam Investments.
The average bear market lasted 14 months, with a total decline in asset values of 22.4%, compared to bull markets, which lasted an average of 45 months and delivered a cumulative return of 123.9%
Elaine Sullivan, head of retail marketing, Putnam Investments, said: "Whether the current bear market has reached a bottom or not is unclear, but one thing we know from this study is that market gains have more than made up for losses for those investors who stayed invested over the long term.
"The market has always recovered but by trying to predict the best time to buy and sell, investors may miss the market's biggest gains."
Analysis showed bull runs to be far more likely than bear markets in both periods of growth (78% versus 22% of the time) and recession (72% versus 28% of the time).
Sullivan added: "A diversified portfolio can temper market extremes and still build wealth over time."
Putnam urged investors considering selling out of positions to think about diversification, liquidity needs, regularity of investments and overall performance as factors to consider.
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