This week’s Barron’s publication had an excellent article about bear markets. The article included a chart produced by Bespoke outlining various bear markets since 1940. The article stated “In the average post-1940 bear market three-quarters of the decline is over by the time the requisite 20% drop has taken place. But the slide can drag on as the bear typically hangs around more than a year.” It goes on to explain that based upon the S&P 500 index the average decline was 30.4% from the peak and took 386 days to reach the bottom. The market had reached 74% of its’ decline by the time the 20% decline defining a bear market occurred.
I enjoy articles such as these that provide good long term perspective and broad market views. They are insightful in both good market times and bad. It is particularly important to keep a long term perspective in times such as these. Barron’s is available at most libraries.