Market Corrections and Recoveries (chart)

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Key Takeaways:

• This chart shows the two dozen stock market corrections since World War II.
• The average correction sees the market fall -14.3% from peak to trough, taking 5 months.
• Recoveries can occur swiftly, taking only 4 months on average. 
• Staying invested helps investors to not miss market rebounds.

Methodology:

• This chart shows every S&P 500 correction since World War II. 
• Market corrections are defined as declines beyond 10% but less than 20% from the previous all time high. 
• Declines of 20% or more are considered bear markets. 
• The market bottom is reindexed to 100 and the x-axis measures days before and after the market bottom.

Date Range: January 1950 to present

Source: Clearnomics, Standard & Poor's