Stocks neared bear-market territory as recently as April 7, 2025, as Wall Street sounded recession alarms for 2025.
Over 150 years, 19 market crashes, from the 1929 Great Depression to the 2021 Russia-Ukraine-triggered downturn, reveal patterns of volatility and recovery, with the latest requiring 18 months to rebound, Emilia Fredlick of Morning Star reported.
Paul Kaplan’s historical data, spanning U.S. stock returns since 1871, shows $1 invested in a stock index then would grow to $30,369 by May 2025, adjusted for inflation.
The 1891 Rich Man’s Panic and Baring Brothers Crisis were short-lived, less severe dips, signaling markets could weather sudden shocks.
The 1911 World War I and influenza bear market cut a $100 investment to $49.04, with recovery delayed until after the 1918 pandemic’s devastation.
The 1929 Great Depression crash, the most brutal, slashed a $100 investment to $21 by 1932, requiring over four years to regain lost ground.
Kaplan’s pain index measures crash impact by decline depth and recovery time, setting the 1929 crash as the 100% severity benchmark.
The 1937 Great Depression and World War II downturn dropped a $100 investment to $52.49 by 1938, climbing back to $104.88 by 1945.
The 1929 crash dwarfed the 1962 Cuban missile crisis, which lost 22.8% but recovered in under a year, by 28.2 times in severity.
The 1973 bear market, driven by inflation, Vietnam, Watergate, and the OPEC oil embargo, reduced a $100 investment to $48.13, taking nine years to recover.
The Lost Decade, spanning the 2000 dot-com bust and 2007-09 Great Recession, saw a $100 investment fall to $46, not recovering until May 2013, a 12-year ordeal.
The 2020 COVID-19 crash, despite a 19.6% plunge, rebounded in four months, earning the title of least painful among the 19 crashes.
The 2021 bear market, with a 28.5% drop over nine months, ranked 11th in severity, surpassing several late 1800s and early 1900s downturns.
Markets have consistently recovered, as seen after the 79% collapse in the 1930s and the turbulent 2022 period, rewarding patient investors.
A diversified portfolio, tailored to risk tolerance and time horizon, remains the cornerstone for navigating crashes, with a $100 investment from 2000 growing to over $300 by May 2025.