Stock market history provides lessons on bear markets

UBS defines a bear market as a decline of more than 20 percent from a peak, distinguishing it from a bull market correction (10 to 20 percent loss) or a standard dip. The bank notes that stocks spend approximately two-thirds of their time at or near record highs, making bear markets the exception rather than the rule.

Historical data from Charles Schwab, based on CFRA analysis of the last twelve US bear markets in the S&P 500, shows that these periods last an average of 14 months. While the shortest lasted about three months, the longest occurred between 1946 and 1949, spanning roughly three years.

Losses vary significantly; the mildest recorded bear market in 1990 saw a 20 percent decline, while the most severe during the 2007–2009 financial crisis resulted in a 59 percent drop over 27 months. On average, previous bear markets have seen declines of approximately 34 percent.