S&P Bear Market History

S&P Bear Market History

June 30, 2022

The chart below will help us all gain a better perspective as to where the market is and some possible indications as to where it might be headed in the future based upon history.

  • The S&P 500 entered bear market territory (down 20% from it’s high) on June 13th …what now? 
  • History shows that the best time to buy stocks is when the thought of doing so makes your stomach turn. 

For those of you that are adding money to your accounts, practically all stocks and mutual funds are on sale. You are purchasing mutual funds and ETF’s (Exchange Traded Funds) at greatly discounted prices. In my opinion, we should reach capitulation (or the bottom) sometime after earnings reports around the end of July. Until that time we can expect some volatility. The chart below shows what has happened in bear markets going back to World War II. The information below demonstrates that to panic during market conditions, such as the ones we are experiencing now, is very unwise.  The chart below points to the fact that PATIENCE, PATIENCE, PATIENCE pays huge dividends. Obviously, past performance is no indicator of future performance. It does, however, provide some very interesting insights.

 S&P 500 Bear Markets Since WWII 

Source: Bloomberg, Lincoln Financial Group. S&P 500 price return index. This chart does not include dividends. All returns are cumulative and returns 1, 5 and 7 years later are measured from the -20% date. 

It is unlikely we will ever catch the bottom of the market, but investing after the market falls 20%, regardless of how much worse it gets, delivers an average cumulative return of 17.5% one year later, 61% five years later and 85% seven years later. 


 DISCLAIMER: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of Global View Capital Advisors. LTD (GVCA) or any of its affiliates.  Past performance is not a guarantee of future results.