When will the bear market end?

US stocks are now in bear market territory. Can history tell us when a bottom is likely?

Bored-looking bear
This bear could be around for. while yet
(Image credit: © Tim Boyle/Getty Images)

It can no longer be denied. US stocks are firmly in bear market territory. The Nasdaq, weighted towards technology stocks, got there a while ago (it’s down more than 30%), but it took until this week for the S&P 500 to finally shed the requisite 20% from its most recent high at the start of 2022. The main question on investors’ minds right now is probably: when will it end?

History is no guide to the future, as the fund literature always tells us, but it’s also the only one we’ve got. According to Bank of America’s Michael Hartnett, stocks lose around 37% in the average US bear market, with an average duration of nine months. Assuming this one follows that pattern, the S&P 500 would bottom out at around 3,000 in October 2022.

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John Stepek

John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.