Bear market restoration: how lengthy does it actually take?

How lengthy does it often take equities to recuperate from a bear market?

I don’t simply imply how lengthy does it take for a bear market to finish. Bears could be formally over in a matter of months.

However how lengthy does it take for us to recuperate our losses? To get again within the black? In actual, inflation-adjusted phrases. 

Sadly, that’s a for much longer slog…

Investing returns sidebar – All returns quoted are inflation-adjusted whole returns (together with dividends). Charges should not included. The bear restoration column reveals you when the inventory market absolutely restored its losses in actual phrases. Complete period measures the interval from the beginning of the bear market till restoration.

World equities: bear market restoration instances 1970-2025 (GBP returns)

Knowledge from MSCI. November 2025. Observe: MSCI World month-to-month returns start in 1970. The December 1969 bear market truly started earlier than that – see the UK and US bear market restoration tables beneath.

To summarise:

• Common bear market loss: -38%
• Common bear market restoration time: 6 years, 6 months
• Shortest bear: 1 yr, 11 months
• Longest bear: 13 years, 9 months

The actual-return figures I’m sharing listed below are a lot worse than the nominal ones you’ll see from sources that ignore inflation.

Sadly although, the price of dwelling is actual as we’ve seen solely too not too long ago.

Inflation-adjusted returns are those that put meals on the desk. So let’s not obscure actuality with nominal figures.

That apart, I’m all the time shocked by the potential depth and severity of actually large bear markets.

Should you weren’t invested through the World Monetary Disaster (GFC) you then haven’t even skilled a median bear market shock but.

God is aware of how terrible many people would really feel if the market have been to fall by 50%.

To this point that’s occurred twice in my lifetime. However fortunately not my investing lifetime.

Smarter than the typical bear

Many individuals appear to consider that they’ll all the time experience out a bear as a result of the market will bounce again in a couple of years.

Because the desk reveals, that might show a critical miscalculation in case you’re gliding in the direction of retirement with a portfolio stuffed stuffed with equities like a jumbo jet carrying an excessive amount of gas.

Bear in mind the restoration intervals above solely get you again the place you began.

It’s additionally value pondering on that incontrovertible fact that, as I say, because the GFC we’ve loved an exceptionally benign bear-free patch.

Lengthy might that proceed, eh?

(Gulp! Do you have to all of the sudden really feel a need to dig deeper, I not too long ago refurbished our article on defensive asset allocation.)

UK equities: bear market restoration instances 1900-2025 (GBP returns)

Okay, we will’t entry World equities information earlier than 1970. So for a long term image, let’s flip to the UK and US file of bear assaults:

Knowledge from Earlier than the cult of fairness: the British inventory market, 1829–1929, (Campbell G, Grossman R, Turner JD, (2021), European Evaluation of Financial Historical past. 25. 10.1093/ereh/heab003.), A Century of UK Financial Traits, and FTSE Russell. November 2025.

Some highlights:

• Common bear market loss: -38%
• Common bear market restoration time: 4 years, 9 months
• Shortest bear: 1 yr, 2 months
• Longest bear: 11 years, 9 months

Surprisingly, inking within the interval wracked by World Wars and the Nice Despair doesn’t make the UK’s bear market restoration stats look any worse than the World index.

That stated, my eye is all the time caught by the UK’s -75% 1972-1974 crash.

Reflecting on that interval additionally jogs my memory we’ve endured intervals of social discontent that makes at this time’s disharmony appear like a main college nativity play.

Bear nation

In some methods, these tables underplay the potential threats to our portfolios.

For one, our tables don’t embody the near-bear markets: losses of 15% or extra that pockmark the inter-bear intervals.

Sub-bear shocks can nonetheless be sufficient to shake somebody whose portfolio has galloped forward within the good instances. A number of years of value of great positive factors can rapidly transfer us from a spot the place we had little to lose to all of the sudden having so much on the road.

In that state of affairs, we might have imperceptibely change into much less danger tolerant than we thought.

Secondly, generally just a few months separates one bear market restoration from the subsequent mauling.

For instance there may be solely a 3 month respite between the January 1972 restoration and the April 1972 market mutilation. So I personally view that interval as one lengthy 15-year bear market rampage. (Maybe it could be with charges included.)

Equally, Y2K’s Dotcom Bust and the GFC actually quantity to a misplaced decade for UK buyers.

Lastly, the final of my ‘glass half empty’ / ‘the glass is smashed all around the ground’ factors is that the UK inventory market has carried out fairly effectively traditionally.

But it’s believable to think about a nastier, parallel universe the place all equities have been ripped up by a Bearzilla catastrophe on the size of the Japanese inventory market crash.

By the way, the December 1989 to September 1990 bear market (within the World equities desk) is essentially brought on by the bursting of the Japanese asset bubble.

US equities: bear market restoration instances 1900-2025 (USD returns)

For completion’s sake, right here’s the bear market restoration file of the world’s most profitable inventory market:

Knowledge from Robert Shiller. October 2025.

• Common bear market loss: -37%
• Common bear market restoration time: 5 years, 4 months
• Shortest bear: 1 yr, 5 months
• Longest bear: 12 years, 9 months

Once more, you can select to label the benighted sequence from the Nice Despair to World Warfare 2 as one big bear lasting from September 1929 till April 1945.

Which might have meant over 15 years till you broke even. And you then acquired a complete 12 months off earlier than the 35% plunge commencing April 1946.

What a time to be alive.

Basically then, US shares have suffered three misplaced a long time in 125 years.

Sure, the US – the land of the permabulls!

This would possibly appear to be scaremongering. But when an investing lifetime lasts 50 to 60 years (accumulation and decumulation phases mixed) then many people are prone to reside by way of the sharp finish of no less than one such stagnant interval.

Investing in the actual world

To this point we’ve thought of uncooked market information. However in actuality, the bear market restoration time we expertise will probably be additional drawn out by funding prices.

And on a brighter word, we will enhance our outcomes by pound-cost averaging by way of the downturn, and by diversifying into defensive belongings – corresponding to authorities bonds – forward of time.

The chart beneath reveals how a bigger allocation to high-quality authorities bonds sped up the restoration from the coronavirus crash versus a pure equities portfolio:

Supply: JP Morgan: Information to the Markets. 31 Might 2022. Web page 63.

The All-Climate portfolio is one other asset allocation method that may dramatically cut back the severity of a bear market.

Sure, you’ll in all probability pay for this cushioning within the type of decrease long-term returns. (Although that’s by no means a certainty).

However experiencing shallower swoons makes it simpler to remain the course. And it’s far tougher to come back again from a bear market in case you panic promote after a deep plunge, lock in your losses, after which miss the rebound.

So take the precise steps to guard your portfolio forward of time. It’s often too late as soon as a bear market runs wild.

Take it regular,

The Accumulator