Are you ready for the next bull market?

Over the past year, massive inflation has raised questions about the strength of the economy, and has led to a sharp decline in the stock market. In fact, broad-based S&P 500 It had its worst first half since 1970, and the index crossed into bear market territory in the second quarter.

The S&P 500 has rebounded slightly since then — it was off 17% from its September 12 highs — but bear market Technically it doesn’t end until the index crosses its previous high. For context, the S&P 500 last peaked on January 3, 2022, at 4,797. This was 253 days ago at the time of writing this article.

Many investors are probably wondering how long the recession will last. Here’s what you should know.

The person is looking out the window, the others are sitting at the table behind.

Image Source: Getty Images.

How long does a bear market last?

The S&P 500 has fallen Improvement 26 bar zones over the past five decades, meaning the market falls 10% or more once every 1.9 years. Bear markets are more serious market corrections. The S&P 500 has fallen into a bear market seven times over the past five decades, meaning the market falls 20% or more once every 7.1 years.

For bear markets over the past 50 years, the chart below shows the start date, trough date, peak loss, and number of days it took the S&P 500 to reach the bottom. Of course, the bear market that started earlier this year is not included as the S&P 500 could fall further.

start date

trough date

peak loss

down time

1/11/1973

10/3/1974

48.2%

630 days

11/28/1980

8/12/1982

27.1%

622 days

8/25/1987

12/4/1987

33.5%

101 days

3/24/2000

10/09/2002

49.1%

929 days

10/9/2007

3/9/2009

56.8%

517 days

2/19/2020

3/23/2020

33.9%

33 days

Data source: Yardeny.

Clearly, bear markets vary wildly in terms of duration and severity. But historical data can still provide meaningful insight into the current situation. Notably, the S&P 500 fell an average of 41.4% during bear markets over the past five decades, and it took an average of 472 days to reach the bottom. In other words, if the current bear market falls in line with the average, the S&P 500 is still 219 days away from the bottom.

To build a complete picture of past market cycles, investors should also consider Bull market in the last five decades. The chart below shows the start date (note that these are the same as the trough dates listed above), peak date, peak profit, and the number of days it takes the S&P 500 to reach the top.

start date

peak date

peak gain

time to top

10/3/1974

11/28/1980

125.6%

2,248 days

8/12/1982

8/25/1987

228.8%

1,839 days

12/4/1987

3/24/2000

582.1%

4,494 days

10/9/2002

10/9/2007

101.5%

1,826 days

3/9/2009

2/19/2020

400.5%

3,999 days

3/23/2020

1/3/2022

114.4%

651 days

Data source: Yardeny.

Based on the above data, the S&P 500 rose an average of 258.8% during bull markets over the past five decades, and took an average of 2,510 days to reach the top. In other words, bull markets tend to last longer and longer than bear markets. For this reason, bull markets have always erased all the losses made by the S&P 500 during bear markets.

How can you prepare for the next bull market?

The Most Important Thing Any Investor Can Do to Prepare next bull market Maintaining a long term mindset. Ignore the day-to-day noise and instead focus on the bigger picture. The worst mistake an investor can make is trying to time market cycles.

Consider the following figures JPMorgan Chase: If you had invested $10,000 in the S&P 500 in early 2002, that amount would have grown 517% to $61,685. That initial amount would have grown by just 183% to $28,260 by the end of 2021. And guess what? Six out of the 10 best days during that time period actually occurred during a bear market, and two of the remaining four days actually occurred at the bottom of a bear market.

In other words, the best days of the stock market are often during a bear market, and missing a few of those days can cause huge losses to your portfolio. This means that the best way to prepare for a bull market is to stay invested during any downturn. Better yet, investors should keep buying high quality stock on a regular basis.

JPMorgan Chase is an advertising partner of The Motley Fool Company The Ascent. Trevor Genevin Have no position in any of the stocks mentioned. The Motley Fool does not hold any positions in any of the stocks mentioned. The Motley Fool has one Disclosure Policy,

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