Bear and Bull Markets in Canada: How to Behave in Each
A bull market is a period of rising asset prices and investor confidence. A bear market is the opposite — a sustained decline of 20% or more from recent highs. Understanding these cycles is essential for Canadians building long-term wealth in TFSAs and RRSPs.
2 min read · Updated June 2026
Bull markets are characterised by economic optimism, strong earnings, and rising participation. The TSX has experienced extended bull runs — the post-2009 recovery lasted over a decade, and Canadian investors who stayed in broad ETFs saw exceptional returns.
Bear markets are shorter but feel more intense. Historically they last about 9-12 months on average. The TSX, like global markets, has recovered from every bear market in its history — including 2008, 2020, and 2022.
The most costly mistake for Canadians is panic-selling during a bear market — converting paper losses into real ones and missing the recovery. This is especially painful inside a TFSA: if you sell $50,000 of ETFs that were purchased for $30,000, you lose $20,000 in contribution room until the following January.
The practical wisdom: bull markets reward patience, bear markets reward discipline. Dollar-cost averaging is particularly powerful in bear markets, as your regular TFSA and RRSP contributions buy more ETF units at depressed prices — positioning you for outsized gains during the recovery.
For Canadian FIRE-focused investors, sequence of returns risk — experiencing a bear market early in retirement — is a critical planning consideration. Having 2-3 years of expenses in cash or GICs provides a buffer so you do not need to sell equities at depressed prices.
Richify's AI agents provide educational context during market volatility, helping you understand what is happening on the TSX and globally — and why staying the course is often the right call.
