History says stock market crash 2.0 is coming
Although investment firms will tell you that past performance is no guarantee of future results, history has a way of repeating itself on Wall Street. And what historical data tells us is that a stock market crash or correction may be inevitable in the short term.
Since 1960, the S&P 500 has navigated its way through nine bear markets (i.e., declines of at least 20%), which includes the most recent one in March 2020. In the three years that followed each of the previous eight bear market bottoms, the S&P 500 experienced an aggregate of 13 downside corrections ranging between 10% and 19.9%, according to data from market analytics firm Yardeni Research. Put another way, every single rebound from a bear market bottom has featured one or two pretty sizable declines -- and more often than not, these crashes or corrections happened well before the three-year mark was up.
Although investment firms will tell you that past performance is no guarantee of future results, history has a way of repeating itself on Wall Street. And what historical data tells us is that a stock market crash or correction may be inevitable in the short term.
Since 1960, the S&P 500 has navigated its way through nine bear markets (i.e., declines of at least 20%), which includes the most recent one in March 2020. In the three years that followed each of the previous eight bear market bottoms, the S&P 500 experienced an aggregate of 13 downside corrections ranging between 10% and 19.9%, according to data from market analytics firm Yardeni Research. Put another way, every single rebound from a bear market bottom has featured one or two pretty sizable declines -- and more often than not, these crashes or corrections happened well before the three-year mark was up.
