A Closer Look at Historical Bear Markets

What is a bear market?

A pullback is a market decline of 5%. A correction is a market decline of 10%. A bear market doesn’t occur until the decline is 20%. 

These declines are nearly impossible to predict, but you can prepare. While volatility has been relatively muted over the past decade, many investors remember living through the last few bear markets and the stress that comes along with watching your account balances go down month after month. Anyone invested in the markets during the 2008 global financial crisis can vividly remember the impact it had on their financial health. However, there is a whole generation of investors that have never experienced a bear market like this or the lessons that come with it. 

The chart below explores the major bear markets throughout history. While volatility is a normal part of investing, the sharpness and longevity of each bear market varies widely.

Bear Market Details Cumulative Returns
of the S&P 500® 1

Market Events Bear Market End Date Bear Declines Duration (years) 1 Year Later 2 Years Later
1 Crash of 1929 - Started the Great Depression Jun 1932 -83% 2.8 162.89% 146.90%
2 1937 Fed Tightening - Premature policy tightening Mar 1938 -50% 1.0 35.18% 59.01%
3 Initial stages of WWII Apr 1942 -30% 2.5 61.23% 74.04%
4 Post WWII Crash - Post-war demand tapering Nov 1946 -22% 2.5 61.23% 74.04%
5 Flash Crash of 1962 - Flash crash, Cuban Missile Crisis/Cold War jitters Jun 1962 -22% 0.4 8.01% 12.72%
6 Tech Crash of 1970 - Economic overheating, civil unrest Jun 1970 -29% 0.4 31.16% 59.37%
7 Stagflation (High Inflation/Slow Growth) - OPEC oil embargo Sept 1974 -43% 1.5 41.83% 57.07%
8 1987 Crash - Program trading, overheating markets Nov 1987 -30% 0.2 23.33% 61.36%
9 Tech Bubble - Extreme valuations, .com boom/bust Sept 2002 -45% 2.0 24.40% 41.65%
10 Global Financial Crisis - Housing bubble, Lehman collapse Feb 2009 -51% 1.2 53.62% 88.30%
11 Global COVID-19 Crisis Mar 2020 -34% 0.2 56.35% 80.81%2
12 Rapid Global Inflation - Supply chain constraints, Russia/Ukraine War Jun 2022 -20% 0.4 ?? ??
Averages -38% 1.2 48.74%3 69.22%3

Source: MSNBC, FactSet, and S&P Dow Jones Indices. The index is unmanaged, is not available for investment and does not incur expenses. Monthly returns are shown for S&P 500® Index, except for the COVID-19 Crisis, which is daily.

As of June 30, 2022.

1 Based on the closest month-end date after the bear market end date. Uses monthly returns.

2 Monthly returns are shown for S&P 500 ® Index, except for the COVID-19 Crisis, which is daily.

3 Average does not include most recent bear market.


Source: MSNBC, FactSet, and S&P Dow Jones Indices. As of June 30, 2022. The indices are unmanaged, are not available for investment, and do not incur expenses. Daily returns are shown for the S&P 500® Index. Click here for index definitions. Past performance is no guarantee of future results.

Investing involves risk, including possible loss of principal. Diversification does not guarantee a profit or protect against a loss in declining markets.

Investments in debt securities are subject to credit and interest rate risk. An increase in interest rates typically causes the value of bonds and other fixed income securities to fall.

Investments in international securities are subject to certain risks of overseas investing including currency fluctuations and changes in political and economic conditions, which could result in significant market fluctuations. These risks are magnified in emerging markets.

Investments in small-capitalization companies are subject to greater price volatility, lower trading volume and less liquidity than investing in larger, more established companies.

Real estate investments are subject to factors such as changing general and local economic, financial, competitive and environmental conditions.

Alternative investments are speculative, subject to high return volatility and involve a high degree of risk including, but not limited to, the risks associated with leverage, derivative instruments such as options and futures, distressed securities, may be illiquid on a long term basis and short sales. There can be no assurance that these types of strategies will achieve their objectives or avoid substantial losses. Alternative investments may also be subject to significant fees and expenses.

Investments in emerging markets are subject to risks such as erratic earnings patterns, economic and political instability, changing exchange controls, limitations on repatriation of foreign capital and changes in local governmental attitudes toward private investment, possibly leading to nationalization or confiscation of investor assets.

A bear market is a prolonged period in which investment prices are falling or are expected to fall, accompanied by widespread pessimism. A 20% decrease of the S&P 500® Index was used and calculated on a monthly basis. Bear markets usually occur when the economy is in a recession and unemployment is high, or when inflation is rising quickly.

Market Risk—Market prices of investments held by the Fund may fall rapidly or unpredictably due to a variety of economic or political factors, market conditions, disasters or public health issues, or in response to events that affect particular industries or companies.

AMG Distributors, Inc., a member of FINRA/SIPC.

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