The impressive returns in 2020 come on the heels of the longest bull market in history, lasting more than 11 years. This was also the second strongest bull market, returning over 400%. For some, the coronavirus-induced bear market was suspiciously short. It began on February 19, 2020, and ended on March 23, 2020, making it the shortest bear market in history. Understandably, some investors are dubious of the whipsaw price movement and concerned about overinflated valuations of domestic equities.
As a refresher, a bull market is a situation in which stock prices rise by 20%, usually after a drop of 20% and before a second 20% decline. A bear market is a condition in which securities prices fall 20% or more from recent highs.