Comments on: Here’s How Long the Stock Market has Historically Taken to Recover from Drops

By: Mr. 39 Months

Mr. 39 Months — Mon, 25 Jun 2018 18:41:16 +0000

Good article and good information. Certainly reinforces the “buy and hold” strategy for most folks.

Still, I’m concerned that the last 2 market drops took so long to recover, in comparison to the previous ones. I think that is because so many more are in the market, bidding up prices and making the market jump. I wouldn’t be surprised after the next drop (and yes, there will be another drop) that it doesn’t take the same 6-8 years to come out.

We will see.

By: Financial Shaper

Financial Shaper — Mon, 25 Jun 2018 11:08:40 +0000

Hi Zach
As always, great read. Stock markets are really very resilient and recover quite nicely from a drop – and in the meantime there are always plenty opportunities to buy stocks cheaply.
Cheers

By: Zach @ Four Pillar Freedom

Zach @ Four Pillar Freedom — Thu, 21 Jun 2018 20:39:05 +0000

In reply to Tom @ Dividends Diversify. Hey Tom, great question! I define a "drop" as any time the S&P 500 opened the year at a lower price than the previous year, so in some cases these were only tiny drops (<5%) while others like the financial crisis of '08 were massive drops (>36%).

By: Tom @ Dividends Diversify

Tom @ Dividends Diversify — Thu, 21 Jun 2018 14:47:59 +0000

Interesting Zach. Nicely put together and easy to follow. One question & one comment:

How did you define a drop from an all time high? A correction of 10%, bear market of 20%, or something different?

My instinct was that the recent recoveries would have been quicker with the pace things move at today versus 20-50 years ago. I was clearly wrong. As you indicate the recent drops were much bigger requiring a longer recovery period.

Tom