Bear Markets: How Deep Is Your Loss?

According to one popular definition, the S&P 500 entered a bull market on June 8, 2023. That means the index has risen 20 percent from its most recent low, which it hit on October 12 of last year. That day also marks the end of the previous bear market, which began on January 3, 2022 and lasted nine months, during which the index fell 25.4 percent. That’s relatively harmless compared to other recent bear markets, as our chart shows, which are often accompanied by drops of 30 percent or more and have lasted 13 months on average since 1973.

Perhaps more important to the average investor is the question of how long it usually takes the market to recover from a bear market, i.e. how long it takes for it to return to its previous high. In that case, a little more patience is required, because as of market close on June 15, the S&P 500 was still 7.7 percent off its January 2022 peak. That explains why some commentators refuse to call it a bull market just yet. Moreover, a bull market requires a broad upward trend according to some definitions and the latest rally has been fueled almost entirely by a few (tech) heavyweights.