ETF Trends
ETF Trends

The stock market and exchange traded funds (ETFs) have taken a bath over the past 15 months and some believe that a bottom has been hit. 

When compared to other bear markets, just where does this one stand?  Henry Blodget of Tech Ticker describes the past 10 bear markets and bear market recoveries since 1950 and outlines the following points:

  • The 10 most recent bear markets have bottomed out down 20% to 57% off the peak.  As for the current market, it is the worst seen since the Great Depression, which posted a decline of 89% from its peak.
  • The bear phases lasted anywhere from three to 30 months; we are in month 17.  The Great Depression,  lasted 30 months.
  • Most the markets offered some sort of retest of the low, but some didn’t.
  • The S&P 500 is trading about in line with its long-term price trend after 15 years of trading above it and is likely that it will continue to trade below trend for a considerable period of time.

It is pretty obvious that the current bear market is a bit more severe than the past bear markets of the past 50 years.  Only time will tell us if the current bear market will mimic that of the Great Depression.  All we can do is look ahead and be on the alert for opportunities, remember that everything is cyclical, educate ourselves and have a good strategy. And remember, don’t let history be your guide when you invest. These are interesting points to note, but each situation is also unique.

Kevin Grewal contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.