The 8 Biggest Bear Markets in US History (and What We Can Learn From Them)
As of this week, we are officially in a bear market . The S&P 500 has lost more than 20% of its value, with some tech stocks hit much harder : Netflix is falling and Amazon shares are down nearly 40% .
Gloomy, right? May be. Probably no. The United States has experienced about 14 bear markets (depending on how you define “bear”) since the end of World War II, and only about half of them have resulted in recessions. Below are eight instructive historical bear markets and some lessons we could learn from each.
But overall, one extremely important lesson pervades them all: you probably shouldn’t even bother with it. Investing should be viewed as a long-term game and these things happen. Imagine the hypothetical world’s unluckiest investor who has spent the last 50 years investing in the stock market only in the days immediately preceding a market crash —in the long run, they will still come out way ahead as long as they keep their money in the store.
(Another important lesson: don’t look at your 401(k) form until things are fixed.)