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If you’ve been watching your portfolio dwindle and asking yourself “how long will a bear market last,” you’re not the only one. Investors around the globe are asking the same question, questioning when the bleeding will finally cease.
The fact is, to know how long did the previous bear market last and how long will this bear market last, we need to look at history, economics, and professionals’ forecasts. But the thing is, nobody has a crystal ball. What we have is history over four decades with patterns that can guide us through these chaotic times.
Let’s get to what bear markets actually are, how long they last, and what could be causing the market to slump now. If you’re an experienced investor or just beginning, having an idea of what to anticipate can assist you in making wiser choices.
What Is a Bear Market?
A bear market is when a broad index falls 20% or more from a recent peak, making “what is a bear market” a simple, widely used bear market definition.
A bear market occurs when stock prices decline 20% or more from their latest peak and remain down for at least two months. It’s essentially the market’s method of announcing that things have gotten rather ugly.
Imagine this way: if the S&P 500 reaches 5,000 points and then plummets to 4,000, you’re technically in a bear market. The drop must be persistent, however, a brief drop back up doesn’t qualify. These times are terrible while you’re experiencing them, seeing your investments dwindle each day.
Bear markets are not corrections, which are brief declines of 10-20%. They’re also the inverse of bull markets, where prices just keep on going up and everybody’s optimistic. It’s an important definition to understand because it allows you to know when we really are in bear market land as opposed to just having typical market volatility.
How Long Do Bear Markets Typically Last?
If you’re asking “how long will the bear market last,” history says about 9-16 months on average, though individual cycles can be much shorter or longer.
That’s where history is our best teacher. When others ask how long bear market will last, the average from history is a good place to start.
Since 1950, the typical bear market has lasted approximately 9 to 16 months. That’s about a year of agony, though some are thankfully shorter and some go on a lot longer. The median is usually closer to 14 months, meaning half are done in less time and half longer.
Then compare that with bull markets, which last on average 3-4 years. Bear markets are generally much shorter but seem way longer when you are observing your funds dwindle. The recovery time, returning to prior highs, typically takes around 2 years from the bottom of the market.
Historical Bear Market Durations
| Bear Market Period | Duration | Market Decline |
| Great Depression (1929-1932) | 33 months | -86% |
| 1973-1974 Oil Crisis | 21 months | -48% |
| Dotcom Crash (2000-2002) | 31 months | -49% |
| Financial Crisis (2007-2009) | 17 months | -57% |
| COVID-19 Crash (2020) | 1 month | -34% |
| 2022 Bear Market | 9 months | -25% |
The COVID-19 bear market was the briefest on record, lasting merely one month due to enormous government stimulus. In comparison, the bear market during the Great Depression lasted almost three years. This broad range is the reason why it’s so difficult to predict exactly how long do bear markets last.
Factors That Influence the Length of a Bear Market
What makes bear markets last longer is sticky inflation, higher-for-longer rates, and deep recessions, while credible policy support and earnings resilience shorten them.
What causes bear markets to persist longer in some instances and to end soon in others? A few major factors decide if you’re in for a brief correction or a lengthy downturn.
The depth of economic recession is incredibly important. If the economy slips into a shallow recession, the bear market could correct itself quite soon. But with deep recessions featuring high unemployment and plummeting consumer purchases, bear markets last far longer. The 2008 financial crisis is a case in point, the systemic banking issues meant recovery took years.
Interest rates and inflation are a huge part. When central banks raise interest rates strongly to combat inflation, it can prolong bear markets because increased borrowing costs reduce business expansion and consumer expenditure. The Federal Reserve’s policy in 2022-2023 is an exemplar of this mechanism.
Corporate earnings trends are the true story. If companies continue to post profits declining quarter after quarter, investors remain gloomy and the bear market continues. When earnings stabilize or begin rising again, that’s usually when markets bottom.
Bear markets can be caused or sustained by global events and uncertainty. Wars, pandemics, political unrest, such things cause uncertainty that deters investors from investing. The more prolonged the uncertainty, the more prolonged the bear market will last.
Government and central bank actions have the ability to significantly abbreviate bear markets. The 2020 COVID crash was brief in part due to record fiscal stimulus and Fed action. Contrast this with the 2000s Dotcom bust, when the Fed was less active and the bear market endured in excess of two years.
How Long Will the Current Bear Market Last?
For “how long will the current bear market last,” the honest answer is uncertain, but inflation’s path, policy rates, and earnings will set the timeline.
Now for the million-dollar question: how long will current bear market last? Looking at 2023-2024 trends, the situation is complex.
The 2022 bear market technically ended in October 2022 after roughly 9 months, when markets bottomed and began recovering. However, some analysts argue we’ve experienced a “rolling bear market” through 2023-2024, with different sectors taking turns declining even as headline indices recovered.
Professional predictions differ widely. Goldman Sachs analysts recommended in late 2023 that while volatility may be experienced, a complete bear market return was not likely due to stabilizing inflation and strong employment.
JP Morgan strategists have been more guarded in their prediction, citing previously seen valuations and chronic inflation threats as possible causes for renewed drops.
Morgan Stanley’s Mike Wilson, notorious for being bearish, foresaw ongoing choppiness up to 2024 as corporate profits adapt to increased interest rates.
Bank of America research indicated that if we do find ourselves in another bear market cycle, it may last 12-18 months based on how rapidly the Fed can lower rates without rekindling inflation.
The challenge with forecasting how long will this bear market continue is that we are in uncharted economic space. We’ve experienced swift rate increases, ongoing inflation, geopolitical tensions, and bank system stress, while jobs have continued to be relatively robust. These don’t come together neatly in the historical template.
Investors can consider the possibility that instead of one prolonged bear market, we’re seeing a series of corrections within an unsettled period of transition. This only adds to the challenge of timing the market.
How Long Did Past Bear Markets Last?
If you’re wondering “how long did the last bear market last,” history ranges from 33 days (2020) to ~3 years (Great Depression), with most near a year.
Knowing how long did last bear market last in different historical situations helps put things into perspective. Let’s examine some of the most significant instances.
The Great Depression (1929-1932) was the ultimate bear market, lasting 33 months with an 86% drop. It was an economic disaster that transformed generations. Various causes, bank failures, protectionist trade practices, and failure of government intervention, prolonged the suffering.
The 1973-1974 bear market stretched 21 months through an oil crisis and stagflation. Slow growth combined with high inflation made for a very difficult setting. Sound familiar? The era has some comparison to current conditions, although the magnitude is different.
The Dotcom crash that lasted from 2000-2002 took 31 months as the tech bubble burst. Overvalued and unprofitable firms finally hit rock bottom. It was slow to recover because it took long for realistic valuations to set in and profitable business models to form.
The 2008 Financial Crisis bear market lasted 17 months, with a vicious 57% drop. The crisis’s systemic character, significant banks collapsing, the housing market meltdown, meant recovery necessitated government bailouts and years of economic fixing.
The COVID-19 crash (2020) was the anomaly, just one month long but with a 34% drop. The speed of the decline was matched only by the speed of recovery, fueled by unprecedented monetary and fiscal stimulus. This taught investors that government intervention can dramatically alter bear market timelines.
How long did the 2022 bear market last? Approximately 9 months, January to October 2022. The S&P 500 dropped approximately 25% before it hit bottom and started recovering. That was comparatively brief in historical terms, although it seemed like an eternity to anyone who watched on a daily basis.
How to Prepare for a Bear Market
The most reliable way to handle a downturn is diversify, favor quality/defensive assets, and stay long-term.
Instead of attempting to precisely time when a bear market will reverse, investors might look into how to ride out the storm and even position themselves for ultimate recovery.
Diversification is still your best defense. Having investments in multiple asset classes, stocks, bonds, real estate, commodities, means not all your assets get pummeled at once. In the 2022 bear market, old 60/40 portfolios struggled as stocks and bonds declined in tandem, which underscores the value of genuine diversification.
Defensive industries perform better. Healthcare, utility, and consumer staples stocks usually fall less during bear markets since individuals still require medicine, electricity, and food despite economic conditions. Investors can consider adding to these sectors when risk in the bear market increases, although this is not a guarantee of protection.
Keeping cash on hand provides you with choices. Having money on the sidelines allows you to purchase good-quality investments at bargain prices when fear is at its highest. Dollar-cost averaging, investing a set amount of money at regular intervals, can be especially useful during bear markets, allowing you to purchase more shares when prices are low.
Long-term view is important. Each and every bear market in history has ultimately come to an end, and markets have new highs later. For those investors who have 10+ year time horizons, bear markets are short-term reversals and not long-term losses if you do not sell out at the worst possible time.
Quality in lieu of speculation becomes increasingly vital. Speculative growth stocks and enterprises with sustainable competitive positions and solid balance sheets that are proven cash-generating machines fare better through bear markets than speculative growth stocks. Investors might look to move into established businesses with predictable cash flows during downturns.
Portfolio rebalancing in bear markets involves selling assets that have performed well and purchasing those that have declined significantly. This compels you to “buy low” despite feeling uneasy.
FAQs
A typical bear market lasts 9 to 16 months, with a midpoint of 14 months. But timing is highly variable based on how the economy is doing, ranging from a matter of weeks to more than two years.
The 2022 bear market lasted around 9 months, until October 2022. Whether or not we’re in a new phase of the bear market in 2024 is depending on what you call it, but projections are that any new downturn will be 12-18 months long depending on inflation and interest rate paths.
Severe recessions, high inflation, aggressive interest rate hikes, declining corporate earnings, geopolitical instability, and systemic financial problems all tend to extend bear markets. Conversely, strong government intervention and quick economic stabilization can shorten them significantly.
Investors can consider diversifying among asset classes, raising exposure to defensive sectors, holding cash reserves, investing in quality companies with solid fundamentals, staying away from panic selling, and going on regularly planned investments using dollar-cost averaging.
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