We Might Be In This Bear Market For The Long Haul

We Might Be In This Bear Market For The Long Haul
Stéphane Renevier, CFA

over 1 year ago1 min

If you think stock prices have dropped far enough by now, or been down for long enough, brace yourself: this bear market might have a long way to go.

That much is clear from the chart above, which shows the peak-to-trough losses in historical bear markets (defined as a decline of more than 20%) and how long it took for prices to find a bottom. Some bear markets have been short and sharp (like 1929), some have been long and mild (1980), and some have been the worst of both worlds (1937, 2007, and 1973).

The current bear market has been relatively short so far, and relatively mild too. So if we go by what we’ve seen in the past, it seems likely that we’re in for even more of a drop, and one that could play out for quite some time. In other words, we’re not out of the woods just yet…

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