How long do recessions and bear markets last?

Recessions have been relatively small blips in economic history.

• Over the last 70 years, the U.S. has been in an official recession less than 15% of all months.
• Moreover, the net longer term economic impact of most recessions has been relatively small.

Recessions are painful, but expansions have been powerful

Sources: Capital Group, National Bureau of Economic Research (NBER), Refinitiv Datastream. Chart data is latest available as of 5/31/22 and shown on a logarithmic scale. The expansion that began in 2020 is still considered current as of 5/31/22, and is not included in the average expansion summary statistics. Since NBER announces recession start and end months, rather than exact dates, we have used month-end dates as a proxy for calculations of jobs added. Nearest quarter-end values used for GDP growth rates.

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Don’t fear the bear

• Over the last 70 years, bear markets have been relatively short with limited losses when compared to the powerful bull markets that have followed.
• Aggressive market-timing moves during a downturn, such as shifting an entire portfolio into cash, can backfire.

Bear markets have been relatively short compared to bull markets

Sources: Capital Group, RIMES, Standard & Poor’s. As of 6/15/22. The bear market that began on 1/3/22 is considered current and is not included in the “average bear market” calculations. Bear markets are peak to-trough price declines of 20% or more in the S&P 500. Bull markets are all other periods. Returns are in USD and shown on a logarithmic scale.

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Rebekah J. Fero, CFP®, AIF®