The Four Totally Bad Bear Recoveries: Where Is Today's Market?

This chart series features an overlay of the Four Bad Bears in U.S. history since the equity market peak in 1929. The numbers are through the June 30, 2023 close. The Four Bad Bears in U.S. history are:

  1. The Crash of 1929, which eventually ushered in the Great Depression,
  2. The Oil Embargo of 1973, which was followed by a vicious bout of stagflation,
  3. The Tech Bubble crash and,
  4. The Financial Crisis following the record high in October 2007.

The series includes four versions of the overlay: nominal, real (inflation-adjusted), total return with dividends reinvested and real total return. The starting point is the aligned peaks prior to the four epic declines. We've used an interval of 252 days for the x-axis as it is roughly the number of market days in a calendar year.

The first chart shows the price, excluding dividends for these four historic declines and their aftermath. We are now 3,959 market days from the 2007 peak in the S&P 500. The bear recovery for the 1973 Oil Embargo is the top performer of the four, up 190.7%. The 2007 Financial Crisis is inches behind up 184.3%.

Four Bear Markets

Inflation-Adjusted Performance

When we adjust for inflation, notice that the 2007 Financial Crisis recovery becomes the top performer with gains of 94.9%. The gap between our current recovery and the other three widens, thanks to exceptionally low inflation for a handful of years.

Four Real Bear Markets