Rebound Years in Bear Market Scenarios

When running bear market scenarios you can tell the program that there will be a market rebound for stocks and even a decline in returns for bonds afterward. The settings for the rebound work as follows:

Rebound Years: The number of years the market rebound will be assumed to take place. For example, if this is set to 3, the stock market will increase more than normal for the three years after the bear market, and the bond market will decline more than normal for those years.

Rebound % Annual Return Increase For Stocks:The percentage points above normal that stocks will return during the rebound year(s). For example, if Rebound Years is set to 3, and Rebound % Annual Return Increase For Stocks is set to 5%, stock returns will increase an additional 5% annually during each of the three years. A portfolio made up of stocks that might normally be assumed to return 7% annually on average would return 12% annually (7% + 5%) for those three
years.

Rebound % Annual Return Decrease For Bonds: The percentage points below normal that bonds will return during the rebound year(s). For example, if Rebound Years is set to 3, and Rebound % Annual Return Decrease For Bonds is set to 2%, bond returns will decrease an additional 2% annually during each of the three years. A portfolio made up of bonds that might normally be assumed to return 2% annually on average would return 0% annually (2% - 2%) for those three years.