When will the next bear market arrive? And once it does, how long will the recovery take?
Stocks neared bear-market territory in April 2025, but the U.S. managed to avoid both a recession and a bear market as the year progressed.
It took the U.S. Financial Crisis*. Kaplan’s research includes monthly U.S. stock market returns dating back to January 1886, along with annual returns from 1871 to 1885.
In the chart below, each bear-market episode is marked by a horizontal line, beginning at the peak cumulative value and ending when that value recovers to its previous high. (Note that we use the term “market crash” interchangeably with bear market, which is typically defined as a decline of 20% or more. Also, because this chart incorporates Consumer Price Index data, it does not fully capture the most recent market movements. Nevertheless, the long-term trends remain valid.)
When accounting for the impact of inflation, one dollar (in 1870 U.S. dollars) invested in a hypothetical U.S. stock market index in 1871 would have grown to $35,082 by the end of February 2026.
The significant growth of that initial dollar underscores the immense advantages of remaining invested for the long haul.
However, the path was far from a steady climb. There were 19 market crashes throughout that timeframe, with varying degrees of severity. Some of the most significant market crashes included:
The Great Depression, which began with the crash of 1929. This 79% loss in the stock market represented the most severe drop of the past 150 years.
The Lost Decade, which encompassed both the bursting of the dot-com bubble and the Great Recession.
World War I and Influenza. After peaking in June 1911, markets soon began to decline due to the breakup of conglomerates.
