Weekend Reading: Four Historical Patterns in the Markets for Investors to Know

This article appears as part of Casey Weade's Weekend Reading for Retirees series. Every Friday, Casey highlights four hand-picked articles on trending retirement topics and delivers them straight to your email inbox. Get on the list here.
Weekend reading historic market patterns Weekend reading historic market patterns
Weekend Reading

History says the average bear market lasts 289 days, while the average bull market tends to run for 997 days. Of course, these aren’t guaranteed numbers, and as with all past data, it’s important to note that past performance cannot predict the future. However, historical information can help you set reasonable market expectations.


Four patterns worth your attention include:

📌 Annual dips: The S&P 500 has dropped below where it began at the beginning of the year, every year, since the 1980s. This has ranged anywhere from a few points to as low as 49 percent.

📌 Market corrections: Considered a decline of 10 percent or more from the recent closing high, market corrections tend to occur in the S&P 500 about every 1.84 years.

📌 Market crashes: While not an exact pattern, the market has a history of crashing every seven-to-eight years.

📌 Flat markets: Rather than trending, markets tend to cycle. Based on historical data, markets have gone flat for a decade or more every 20 years since 1909.

You will learn as a long-term investor that markets move in a constant ebb and flow. The ability to stick with your personal investment strategy plus diversification is key to riding the waves.