if you hear anybody say “stocks have been crashing!!”, they’re uninformed. 2020 was a stock market crash. 2022 is a bear market. there’s a difference. it may be a crash for some people when the S&P 500 is down 20% and their portfolio is down 40-70%, or even 80%+, but this is just with very speculative or leveraged positions. The bear market has just “officially” started earlier last month. the market (S&P 500) hasn’t priced in a recession at all, which could end up seeing things down another 15%-25%. It’s currently pricing in a “soft landing”, but if this recession turns sour, then you’ll realize that since 1929, S&P 500’s average bear-market decline stands at 33.5%, according to Dow Jones Market Data. The median drawdown comes to 33.2%.
I believe 2021 caused a lot of people to think if stocks go down at all, that’s considered a “crash”, and 2020 caused people to believe bear markets last one month before recovering to an all time high and then some. This is not the case. I really roll my eyes when people say a 20% decline on the S&P 500 over the course of 6 months is a “crash”. let’s not be overdramatic here.
