How much longer do bull markets last than bear?
Bear markets tend to be short-lived.
A bear market can last from a few months to several years. The longest bear market spanned 61 months from 1937 to 1942 during the Great Depression. Bull markets tend to last longer than bear markets with an average duration of 6.6 years. The average duration of a bear market is 1.3 years.
3. How long the average bull market lasts. As much as investors would like the answer to this question to be "forever," bull markets tend to run for just under four years. The average bull market duration, since 1932, is 3.8 years, according to market research firm InvesTech Research.
Economic growth actually accelerated above its 10-year average in 2023. That resilience, coupled with a fascination about artificial intelligence (AI), changed investors' collective mood. The S&P 500 soared throughout the year and finally reached a new high in January 2024, making the new bull market official.
These charts of bear and bull markets in the S&P 500 since 1932 illustrate this well—there have 12 bear markets compared to 14 bull markets, but the duration of the bear markets is much, much shorter: The bear markets are just 25 months (around 2 years) long in average, compared to an average length of 59 months ( ...
The longest bull market started in March 2009, near the end of the Great Recession, and roamed Wall Street for almost 11 years.
But during a bull market, people who check often perhaps feel wealthier, and even though that money is locked up in an account that's for retirement, psychologically you feel wealthier, so you might be more likely to just spend more money, which can lead to lower savings rates.
A bull market ends when stocks fall 20 percent below their last high — a period known as a bear market. The last time the S&P 500 entered a bear market was in 2022, as investors recoiled in the face of stubborn inflation and rising interest rates.
Economic downturn or recession
However, economic indicators can change, and if there are signs of an economic downturn or recession, it can trigger a reversal in market sentiment. Factors such as slowing economic growth, rising inflation, or geopolitical tensions can contribute to the end of a bull run.
The S&P 500's longest bull market lasted 11 years, from 2009 to 2020, while its shortest, beginning in October 1966, lasted just over two.
Will stock bounce back in 2024?
"Some traders predict a flat or down market in the first half of 2024 due to high inflation, recession fears and rate hikes from the Fed. However, others foresee a bull market continuing, citing potential Fed rate cuts, earnings growth and historical trends around election years."
For now at least, analysts are anticipating S&P 500 earnings growth will continue to accelerate in the first half of 2024. Analysts project S&P 500 earnings will grow 3.9% year-over-year in the first quarter and another 9% in the second quarter.
The S&P 500 generated an impressive 26.29% total return in 2023, rebounding from an 18.11% setback in 2022. Heading into 2024, investors are optimistic the same macroeconomic tailwinds that fueled the stock market's 2023 rally will propel the S&P 500 to new all-time highs in 2024.
The bounce-back from the 2008 crash took five and a half years, but an additional half year to regain your purchasing power.
Excluding the bear market that just ended June 2023, the last bear market occurred in March 2020 amid COVID-19 pandemic lockdowns that lead to a brief recession.
It defines a bear market as a decline of at least 20% in the S&P 500 from its previous peak. It ends when the index reaches its low before then going on to set a new high. S&P uses closing prices for its calculations. Bull markets in both stocks and bonds are far more common than bear markets.
The bull market is already well underway
Generally speaking, the best way to be sure about a new bull market is to look for two milestones. First, the market should rise at least 20% from its low. The S&P 500 hit its lowest point on Oct. 12, 2022.
However, as a singular event, the stock market crash itself did not cause the Great Depression that followed. In fact, only approximately 10 percent of American households held stock investments and speculated in the market; yet nearly a third would lose their lifelong savings and jobs in the ensuing depression.
The shortest bull market, which ran from June 1, 1932, to Sept. 7, 1932, lasted 98 days. The longest bull market lasted 4,494 days, from Dec. 4, 1987, to March 24, 2000.
Your investment is put into various asset options, including stocks. The value of those stocks is directly tied to the stock market's performance. This means that when the stock market is up, so is your investment, and vice versa. The odds are the value of your retirement savings may decline if the market crashes.
Will I lose all of my 401k if the market crashes?
Your 401(k) can recover after a recession if you give it enough time to regain losses. Historically, the stock market has always recovered from recessions to eventually reach new highs. In fact, your 401(k) may begin to recover before the recession ends.
“We believe the key thing to do is to keep your 401(k) funds invested. If you take them out of the market, you may lock in losses and could miss out on opportunities for market rebounds.”
In 2024, we look for lower yields but expect bouts of volatility along the way, as markets continue to try to anticipate shifts in Fed policy. Assuming the Fed continues to lag market expectations for rate cuts, the market will be very attuned to every data point, likely causing yields to trade in wide ranges.
You should always stay on the same side of momentum. So, you can buy high and wait for the stock to go higher; or you can use dips to buy. Either ways, you should never try to outguess the market. In a bull market, the very idea of selling against momentum can land you in big losses.
Data source: Yardeni Research. Note: All percentages and averages have been rounded to the nearest whole number. As shown above, the S&P 500 returned an average of 184% during past bull markets, and the index realized those returns over an average of 1,964 days, or roughly 64 months.
