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 September 29, 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 (then) 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. We've chosen the aligned peaks before each of the four epic declines as our starting point. An interval of 252 days has been used for the x-axis, roughly equivalent to the number of market days in a calendar year. (Note that the x-axis in all charts shows the number of years since each bear market's peak, which have been aligned.)

The first chart below shows the price, excluding dividends, for these four historic declines and their subsequent recoveries. As of September 29, we are 4,022 market days from the 2007 peak in the S&P 500. Among the four, the bear recovery for the 1973 Oil Embargo stands out as the top performer, with a remarkable gain of 212.9%, while the Crash of 1929 lags behind as the worst performer, down 48.0%.

Four Bear Markets Nominal Price Growth

Inflation-Adjusted Performance

When adjusting for inflation, the 2007 Financial Crisis recovery emerges as the top performer, boasting gains of 85.6%. This gap between our current recovery and the other three widens due to several years of exceptionally low inflation.

Four Real Bear Markets