Learn the stock market › The stock market from zero › Lesson 9 of 9
Bull and bear markets
The bear markets
The table comes from the study of every crash since 1928, which has more on each one.
| Period | Fall | Time down | Time to new high |
|---|---|---|---|
| Sep 1929–Jun 1932 | −86.2% | 32 mo | 300 mo |
| Aug 1956–Oct 1957 | −21.5% | 15 mo | 26 mo |
| Dec 1961–Jun 1962 | −28.0% | 6 mo | 21 mo |
| Feb 1966–Oct 1966 | −22.2% | 8 mo | 15 mo |
| Nov 1968–May 1970 | −36.1% | 18 mo | 39 mo |
| Jan 1973–Oct 1974 | −48.2% | 21 mo | 90 mo |
| Nov 1980–Aug 1982 | −27.1% | 20 mo | 23 mo |
| Aug 1987–Dec 1987 | −33.5% | 3 mo | 23 mo |
| Mar 2000–Oct 2002 | −49.1% | 31 mo | 86 mo |
| Oct 2007–Mar 2009 | −56.8% | 17 mo | 66 mo |
| Feb 2020–Mar 2020 | −33.9% | 1 mo | 6 mo |
| Jan 2022–Oct 2022 | −25.4% | 9 mo | 25 mo |
What happened in the big ones is in the course Stock market crashes in history. A fall of at least 20% is a common line, not a law of nature. A crash is counted from the high until that high is reached again, so a new fall below the old high belongs to the same bear market.
The bull markets
The rises, counted from each low to the high before the next bear market.
| From the low | To the high | Rise | Time |
|---|---|---|---|
| Jun 1932 | Aug 1956 | +1028% | 24 yrs |
| Oct 1957 | Dec 1961 | +86% | 4 yrs |
| Jun 1962 | Feb 1966 | +80% | 4 yrs |
| Oct 1966 | Nov 1968 | +48% | 2 yrs |
| May 1970 | Jan 1973 | +74% | 3 yrs |
| Oct 1974 | Nov 1980 | +126% | 6 yrs |
| Aug 1982 | Aug 1987 | +229% | 5 yrs |
| Dec 1987 | Mar 2000 | +582% | 12 yrs |
| Oct 2002 | Oct 2007 | +101% | 5 yrs |
| Mar 2009 | Feb 2020 | +401% | 11 yrs |
| Mar 2020 | Jan 2022 | +114% | 2 yrs |
| Oct 2022 | Still running | +106% | 4 yrs |
The first is that long because the S&P 500 did not get back to its 1929 high until 1954, so the falls on the way there are not bear markets of their own here. The median rise lasted four and a half years and gave +110%. The index is counted without dividends.
How do you know which one you are in?
Only afterwards. A 20% fall shows only once it has happened, and nobody rings a bell at the low.
Right now the S&P 500 is 5.7% below its latest high, so on this count a rise is under way.
Test yourself
The market has fallen 12% from its high. Is that a bear market?
How is it doing now? How the market did.