Bear Markets- A Quick Look Back
I am a firm believer that in order to succeed in the markets, you need to have an understanding of the markets. Understanding the markets will lead to a level of comfort playing the markets. Once you’re comfortable in any situation (in this case, the stock market), you tend to operate better within it.
It is then fitting for me to summarize important data points about Bear Markets and Corrections of the past. This isn’t a deep analysis but rather a condensed view---
---A Quick Look Back!
It is then fitting for me to summarize important data points about Bear Markets and Corrections of the past. This isn’t a deep analysis but rather a condensed view---
---A Quick Look Back!
- A Bear Market is defined as a draw down of 20% or more in the major indexes (S&P 500, Dow Jones Industrial, NASDAQ) lasting 2 months or more.
- Different from a Bear Market, a Market Correction is defined as a 10% drop in the major indexes for a duration of less than 2 months.
- We’ve had 25 Bear Markets since 1929.
- Our Last Bear Market ended in 2009. It began in 2007 and lasted about 17 months, with a draw down of over 55%.
- Bear Markets last an average of 10-17 months (under 2 years).
- Our shortest Bear Market since 1929 occurred in 1987. It lasted only 3 months with a drop of over 30%.
- Bear Markets occur every 3.4 years (since 1929).
- Bear Markets typically follow Market Corrections.
- We are a few years overdue for a Bear Market, although we’ve had multiple Market Corrections along the way. And my last point....
When there’s a turn-around, Bull Markets typically average about 100% return!
Bank!!!
Bank!!!
Did you miss my article reminding you that Bear Markets present buying opportunities? If so, find it here.
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