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How Long Do Bear Markets Last? | The Mesh Report

How Long Do Bear Markets Last?

Dividend Sensei May 11, 2022 Comments Off on How Long Do Bear Markets Last?

By Ben Carlson 

As of the close on Monday the S&P 500 is now down almost 17% from all-time highs.

The technical definition of a bear market is down 20% but we’re close enough for me to call it.

It’s a bloodbath out there.

The Nasdaq 100 and Russell 2000 are both already there:

It’s been a couple of years since we’ve experienced a bear market so it’s probably a good time for a refresher:

  • Bear markets are normal.
  • They can be painful.
  • The reasons are always different but the emotions are the same.
  • No one knows how long they will last.
  • They do come to an end eventually.

The length of the current iteration probably depends on how long inflation stays elevated, how resolute the Fed is with tighter monetary policy and if these two factors combine to throw us into a recession.

Things could surely get worse before they get better or this could all end with one sentence from Jerome Powell if he decides to tap out. The bottom will look obvious in hindsight but, as always, predicting these things in real-time is not easy.

Historical comparisons cannot provide the blueprint for the present situation but they can help put things into perspective in terms of the length and duration of past bear markets.

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