Morningstar - Q2 2020 - 41

EXHIBIT 2

Traversing Canadian Crashes Like the U.S. market, Canada's

A Flock of Canadian Turkeys Canada has experienced a black
turkey about once every seven years.

reward investors over the long term.
Growth of CAD 1 and Peak Values of the S&P/TSX Composite Index,
February 1956-March 2020

Cumulative Wealth
Logarithmic Scale

Largest Declines in the S&P/TSX Composite, February 1956-March 2020
Decline Decline
Rank
Peak

Peak Cumulative Value
$1,000

Market Crash Episode

$249.28
$193.81
100

1975
.

1995

2020

3 31 2 2 .

Canada has also had its share of market
declines. Nine of these declines were 2 or
more-on average, about one every seven
years. Including the current decline would bring
the number of crashes of 2 or more to
1 . The current crash would be the ninth worst.
The peak before the current decline was
in January; the drop since that peak was 2 .2
as of March 31. The worst decline was during
2 - 9. The
second worst was around the time of the dot-com
bubble crash. As measured by the Pain
Index, however, the dot-com bubble crash was
worse because although the declines
were almost the same, the period from peak to
recovery of the dot-com bubble crush was
much longer.
With Risks Come Rewards for the Patient
The presence of black turkeys in the historical stock
market return data is undeniable. What is
happening today due to the coronavirus is only
the most recent example. Nevertheless, the lesson
volatility. It is about the possibility of depressed
markets and extreme events. Fortunately, for
investors who can stay in the market over the long

February 2 11

Pain
Rank

Pain

43.3

May 2 8

February 2 9

2

43.2

August 2

September 2 2 July 2

1

3

39.1

June 1981

June 1982

April 1983

4

2 . 9

4

34.9

September 19 4 April 19 8

2

4 .13

9

12.18

19 3

3

39.8
1 .

2 .4

April 1998

August 1998

November 1999

2 .9

May 19

December 19

April 19 9

2 .44 July 198

November 198

July 1989

8

2 .38 May 19 9

June 19

January 19 2

21.22

9

2 . 8 December 1989

March 1993

18.48

1
1955

Recovery

1

10

0

Trough

199

1.9
8

1 .28

Source: Morningstar Direct.

run, the markets continue to provide rewards for
taking these risks. K
Paul D. Kaplan, Ph.D., CFA, is director of research with
Morningstar Canada. He is a member of the editorial board
of Morningstar
.
References
. .

. .

.2 .
181
192
Performance and Predictability." Journal of Financial
Markets
. 4.
Ibbotson, . . 2 2 . 2 2 SBBI Yearbook: Stocks, Bonds,
Bills, and Inflation.
.
Kaplan, . . 2 9 .
Market Drawdowns." Morningstar Alternatives Investments
Observer, Third Quarter. Chapter 1 in Kaplan (2 12).
Kaplan, . . 2 9 .
. Morningstar
Advisor, February/March. Chapter 18 in Kaplan (2 12).
Kaplan, . . 2 9 .
Morningstar Institutional Perspective

.
.

Kaplan, . . 2 1 . "Stock Market Bubbles and Crashes:
A Global Historical and Economic Perspective." Morningstar
Alternatives Investments Observer, First Quarter. Chapter
1 in Kaplan (2 12).

Kaplan, P. D., ed. 2 12. Frontiers of Modern Asset Allocation.
Hoboken, N.J.: John Wiley & Sons.
Kaplan, P. D., Cooper, G., Ibbotson, R. G., & Mandelbrot,
. 2 9. "Getting a Read on Risk: A Discussion with
Roger Ibbotson, George Cooper, and BenoƮt Mandelbrot
on the Crisis and Risk Models." Morningstar Advisor,
February/March. Chapter 2 in Kaplan (2 12).
Kaplan, P. D.
T., Gambera, M., Yamaguchi, K.,
Xiong, J., & Blanchett, . 2 9. "The History and Economics
of Stock Market Crashes." In Siegel (2 9).
Malkiel, . . 2 19. A Random Walk Down Wall Street. New
York: W.W. Norton & Co., Inc.
. . . 1982. The Dow Jones Averages, 1885-
1980. Homewood, IL: Dow Jones Irwin.
Siegel, L. B., ed. 2 9. Insights into the Global Financial Crisis.
.
CFA Institute.
Siegel, . . 2 1 .
2

2 9.

Financial Analysts Journal, July/August.

Taleb, . . 2 . The Black Swan: The Impact of the Highly
Improbable. New York: Random House.

.

41



Morningstar - Q2 2020

Table of Contents for the Digital Edition of Morningstar - Q2 2020

Contents
Morningstar - Q2 2020 - CT1
Morningstar - Q2 2020 - CT2
Morningstar - Q2 2020 - Cover1
Morningstar - Q2 2020 - Cover2
Morningstar - Q2 2020 - 1
Morningstar - Q2 2020 - 2
Morningstar - Q2 2020 - Contents
Morningstar - Q2 2020 - 4
Morningstar - Q2 2020 - 5
Morningstar - Q2 2020 - 6
Morningstar - Q2 2020 - 7
Morningstar - Q2 2020 - 8
Morningstar - Q2 2020 - 9
Morningstar - Q2 2020 - 10
Morningstar - Q2 2020 - 11
Morningstar - Q2 2020 - 12
Morningstar - Q2 2020 - 13
Morningstar - Q2 2020 - 14
Morningstar - Q2 2020 - 15
Morningstar - Q2 2020 - 16
Morningstar - Q2 2020 - 17
Morningstar - Q2 2020 - 18
Morningstar - Q2 2020 - 19
Morningstar - Q2 2020 - 20
Morningstar - Q2 2020 - 21
Morningstar - Q2 2020 - 22
Morningstar - Q2 2020 - 23
Morningstar - Q2 2020 - 24
Morningstar - Q2 2020 - 25
Morningstar - Q2 2020 - 26
Morningstar - Q2 2020 - 27
Morningstar - Q2 2020 - 28
Morningstar - Q2 2020 - 29
Morningstar - Q2 2020 - 30
Morningstar - Q2 2020 - 31
Morningstar - Q2 2020 - 32
Morningstar - Q2 2020 - 33
Morningstar - Q2 2020 - 34
Morningstar - Q2 2020 - 35
Morningstar - Q2 2020 - 36
Morningstar - Q2 2020 - 37
Morningstar - Q2 2020 - 38
Morningstar - Q2 2020 - 39
Morningstar - Q2 2020 - 40
Morningstar - Q2 2020 - 41
Morningstar - Q2 2020 - 42
Morningstar - Q2 2020 - 43
Morningstar - Q2 2020 - 44
Morningstar - Q2 2020 - 45
Morningstar - Q2 2020 - 46
Morningstar - Q2 2020 - 47
Morningstar - Q2 2020 - 48
Morningstar - Q2 2020 - 49
Morningstar - Q2 2020 - 50
Morningstar - Q2 2020 - 51
Morningstar - Q2 2020 - 52
Morningstar - Q2 2020 - 53
Morningstar - Q2 2020 - 54
Morningstar - Q2 2020 - 55
Morningstar - Q2 2020 - 56
Morningstar - Q2 2020 - 57
Morningstar - Q2 2020 - 58
Morningstar - Q2 2020 - 59
Morningstar - Q2 2020 - 60
Morningstar - Q2 2020 - 61
Morningstar - Q2 2020 - 62
Morningstar - Q2 2020 - 63
Morningstar - Q2 2020 - 64
Morningstar - Q2 2020 - 65
Morningstar - Q2 2020 - 66
Morningstar - Q2 2020 - 67
Morningstar - Q2 2020 - 68
Morningstar - Q2 2020 - 69
Morningstar - Q2 2020 - 70
Morningstar - Q2 2020 - 71
Morningstar - Q2 2020 - 72
Morningstar - Q2 2020 - 73
Morningstar - Q2 2020 - 74
Morningstar - Q2 2020 - 75
Morningstar - Q2 2020 - 76
Morningstar - Q2 2020 - 77
Morningstar - Q2 2020 - 78
Morningstar - Q2 2020 - 79
Morningstar - Q2 2020 - 80
Morningstar - Q2 2020 - 81
Morningstar - Q2 2020 - 82
Morningstar - Q2 2020 - 83
Morningstar - Q2 2020 - 84
Morningstar - Q2 2020 - 85
Morningstar - Q2 2020 - 86
Morningstar - Q2 2020 - 87
Morningstar - Q2 2020 - 88
Morningstar - Q2 2020 - 89
Morningstar - Q2 2020 - 90
Morningstar - Q2 2020 - 91
Morningstar - Q2 2020 - 92
Morningstar - Q2 2020 - 93
Morningstar - Q2 2020 - 94
Morningstar - Q2 2020 - 95
Morningstar - Q2 2020 - 96
Morningstar - Q2 2020 - Cover3
Morningstar - Q2 2020 - Cover4
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2024q2
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2024q1
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2023q4
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2023q3
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2023q2
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2023q1
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2022q4
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2022q3
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2022q2
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2022q1
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2021q4
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2021q3
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2021q2
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2021q1
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2020q4
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2020q3
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2020q2
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2020q1
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2019winter
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2019fall
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2019summer
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2019spring
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20191201
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20181011
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20180809
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20180607
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20180405
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20180203
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20181201
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20171011
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20170809
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20170607
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20170405
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20170203
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20171201
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20161011
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20160809
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20160607
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20160405
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20160203
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20161201
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20151011
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20150809
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20150607
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20150405
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20150203
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20151201
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20141011
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20140809
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20140607
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20140405
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20140203
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20141201
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20131011
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20130809
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20130607
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20130405
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20130203
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20131201
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20121011
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20120809
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20120607
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20120405
https://www.nxtbook.com/nxtbooks/morningstar/investorconference2012
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20120203
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20121201
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20111011
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20110809
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20110607
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20110405
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20110203
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20111201
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20101011
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20100809_lincoln
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20100809
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20100607_lincoln
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20100607
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20100405_lincoln
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20100405
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20100203
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20101201
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20091011
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20090809
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20090607
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20090405
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20090203
https://www.nxtbook.com/nxtbooks/morningstar/advisor_2008fall
https://www.nxtbook.com/nxtbooks/morningstar/advisor_2008summer
https://www.nxtbook.com/nxtbooks/morningstar/advisor_2007spring
https://www.nxtbook.com/nxtbooks/morningstar/advisor_2007fall
https://www.nxtbook.com/nxtbooks/morningstar/advisor_2007summer
https://www.nxtbook.com/nxtbooks/morningstar/advisor_2008spring
https://www.nxtbook.com/nxtbooks/morningstar/advisor_2008catalog
https://www.nxtbook.com/nxtbooks/morningstar/advisor_2008winter
https://www.nxtbookmedia.com