How Long Do Bear Markets Last?

Bear markets, defined as a 20% or more pullback from recent highs, typically last for an average of between nine and fifteen months. They are an inevitable phase of market cycles that move from expansion to contraction and vice versa. However, these downturns eventually end, and the market climbs higher in the long run. Checking data from Yardeni Research, since and including the market crash that sparked the Great Depression, the S&P 500 index has had 22 bear markets, even as those invested long-term have had positive returns over time.

Still, a bear market can cause significant short-term losses for investors. Understanding how long they typically last and what influences their length can help you keep perspective when there’s market tumult.

Key Takeaways

• Bear markets (a 20% or more drawdown) typically last nine to 15 months.
• Downturns triggered by geopolitical or natural events often recover quicker than those caused by underlying fundamentals.

Average Duration of Bear Markets

Working with data from Yardeni Research, we get an average duration of about 11.4 months since 1928 for bear markets in the S&P 500 index, with a full recovery (back to the previous peak) typically around 2.5 years.

The data can help you stay calm while others panic, though a lot depends on where you have your investments. For example, the Nasdaq 100, an index of the 100 most valuable stocks on that exchange, which tends to be tech-heavy, took more than 15 years to come back to its previous peak after the dot-com bust.

Factors Influencing Bear Market Duration

There are three main categories of bear markets:

Event-Driven Bear Markets

Economic shocks and unexpected events, such as pandemics and geopolitical conflicts, can cause event-driven bear markets. The early 2020 downturn triggered by the pandemic serves as a prime example. Despite a rapid and steep decline of over 30%, this bear market lasted only about one month because of swift and coordinated policy responses that restored investor confidence.

Cyclical Bear Markets

Cyclical bear markets occur in tandem with broader economic slowdowns or recessions. These often last longer, as can be seen in the table below, because they develop from persistent macroeconomic issues, such as increasing interest rates, unemployment, and falling corporate earnings.

Structural Bear Markets

Bear markets may also develop when fundamental shifts or imbalances occur after speculative bubbles burst or financial crises take place. Also known as “secular” bear markets, these can see drastic drops of more than 50% and require a longer recovery lasting years or even decades (e.g., Japan from the 1990s through the 2000s), as the economy recalibrates to the new reality.

Historical Extremes: Shortest vs. Longest U.S. Bear Markets

While the averages provide a useful guide, it’s also helpful to know how short or long they have lasted:

The Shortest Bear Market

The bear market of March 2020, at the onset of the pandemic, is the shortest on record. The S&P 500 plunged more than 30% in just 33 trading days before rallying to new highs within four months. This rapid recovery was largely due to unprecedented fiscal stimulus and monetary policy support, along with investors’ desire to quickly reenter the market after such a steep decline.

While it’s still too early to tell, the brief bear market that accompanied Trump’s sweeping tariffs may end up being the shortest on record (a matter of just a few days), before the President reversed course, causing markets to rebound, though with significant volatility remaining.

The Longest Bear Market

Determining which is the longest U.S. bear market depends on the method used. Looking at multiple indexes, researchers have identified a 61-month period (about five years) ending March 1942 as the longest. The 60% market decline was sparked by the economic and geopolitical disruptions of World War II.

Other metrics point to the 1929–1932 downturn of the Great Depression, which lasted 33 to 48 months (again, depending on methodology). This period saw the Dow lose up to 89% of its value before returning to steady gains. The S&P index’s longest bear market came after the dot-com bubble burst.

The Bottom Line

Bear markets typically last a little less than a year, but the duration and recovery time depend on the cause of the decline and underlying fundamentals. While downturns can be painful for investors, they do eventually end, and the stock market returns to a long-term growth trend.