It’s not your imagination: This bear is a mean one
This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.
As bear markets go, this one now is worse than average.
At Tuesday’s close of 996.23 the Standard & Poor’s 500 index was down 36.3% from its record closing high reached on Oct. 9, 2007.
Since 1937 there have been 11 bear markets, as Standard & Poor’s measures them. The average loss of value, from peak to trough, was 34% (not counting the current decline).
The minimum decline to qualify as a bear market is a 20% drop in the index.
Ned Davis Research calculates bull and bear markets differently, and counts 21 bear phases since the late 1930s, excluding this one. By its measure the average S&P 500 loss has been 29%.
In terms of duration, bear markets have been as short as three months (in 1987 and again in 1990) and as long as 62 months (1937-42), according to S&P.
At 12 months, the current bear is well short of the average length of 20 months, although excluding 1937-42 the average is 16.2 months, based on S&P data.
Two other historical notes:
--- If you’re rooting for this sell-off to end soon, we’re in the right month for it: October has a reputation as a bear slayer. Five of the 11 bear markets that S&P counts have ended in October (in 1957, 1966, 1974, 1990 and 2002).
--- Thursday marks a double anniversary in the annals of recent bull and bear markets: The 2000-02 bear ended on Oct. 9, 2002, with the S&P 500 at 776.76. The bull market that followed ended last year on the same date, with the index at 1,565.15.