The last seven bear markets have seen an average decline of 40% 1.1 year, and 2 years out is usually favorable.
This table shows the performance of the stock market at various time periods after a bear market ends. Source: Bloomberg, S&P 500 index is unmanaged and cannot be invested in directly, past performance is not a guarantee of future returns. Toward the latter stages, big declines are typically accompanied by big gains Consider the bear-market perspectives below, which offer some support to a case that we may be inching closer to the end than the beginning of this downturn. We maintain our view that we're progressing through the bottom portion of a "U-shaped" recovery, and the potential for interim pockets of strength, as well as costs associated with trying to time the ins and outs, highlight the importance of a disciplined strategy to ensure you're well positioned for an eventual, more sustainable rebound. We'd caution against succumbing to this tendency, even as moving to the sidelines or higher short-term yields offer what may appear at the moment to be an enticing hiding spot.
They have a knack for turning long-term investors into short-term traders. We don't think we've seen the end of inflation-driven volatility, but the market's measured reaction – which we think indicates that there is already a large amount of pessimism priced into stocks and bonds - offers an encouraging signal that we're making progress within the current bear market.īear-market declines are never comfortable. While the September consumer price index (CPI) showed that consumer prices are still rising at an uncomfortable clip, stocks rallied sharply on Thursday (the Dow staged a 1,500-point intraday swing higher) to stem the tide of weakness that had led equities back to 2022-lows 1. Markets showed a welcome glint of resiliency last week, holding on despite an inflation report that could have added to the chorus of concerns that the Fed is destined to overstay its welcome.
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