By Ben Carlson
A Wealth of Common Sense
After a little more than two years, the S&P 500® Index finally took out the highs from January 2022 on Friday. New all-time highs!
This bear market felt nasty in 2022, but it was fairly run-of-the-mill when compared with the biggest downturns over the past 70+ years.
The average bear market since 1950 has seen a drawdown of 35%, taking 381 days to bottom out and more than 1,100 days to go from the prior peak to new all-time highs.1 This is the kind of thing you should expect to happen every five or six years.2 Of course, we’ve now experienced two bear markets in four years, but that’s how market averages work. You can’t set your watch to these things.
So what happens next?
1If you were to take out the three biggest crashes (1973-1974, 2000-2002, and 2007-2009), the average old peak to new peak was an average of 614 days.
2Including the most recent one, there have been 11 bear markets since 1950, or one every six-and-a-half years.
The commentary is the opinion of the author and distributed with permission under limited license. All data and charts presented herein are from sources deemed to be reliable but are not guaranteed to be accurate. The financial information presented is for information and educational purposes and is not a substitute for professional advice; use of or reliance on any information herein is solely at your own risk. Edited from the original.