Stock market drawdowns—those gut-wrenching drops from peak to trough—are a normal part of investing. Some are quick and some are longer than most people remember. They are all painful.
While the declines grab headlines, what’s often overlooked is how long it can take for the market to climb back to its previous highs. History shows that recoveries can stretch from months to decades, testing even the most patient investors.
Below, I’ve compiled some of the largest S&P 500 drawdowns, focusing on the recovery times to emphasize the importance of a long-term perspective.
These drawdowns highlight the volatility of stock markets, but history shows that recoveries eventually follow, often leading to new highs. For context, even in years with positive annual returns, intra-year drawdowns are typical.
| Event | Peak | Through</> | Draw % | Duration Months | Months to New High |
| Depression | 09/1929 | 06/1932 | -86% | 34 | 280 (11/1954) |
| Bear Mkt | 03/1937 | 04/1942 | -60% | 61 | 60 (post WWII) |
| Global Crisis | 10/2007 | 03/2009 | -56.8% | 17 | 49 (03/2013) |
| Dot-Com | 03/2000 | 10/2002 | -49.2% | 31 | 56 (03/2007) |
| Oil Crisis | 01/1973 | 10/1974 | -48.2% | 21 | 69 (07/1980) |
| Bear Mkt | 11/1968 | 05/1970 | -36.1% | 18 | 33 |
| Covid 19 | 02/2020 | 03/2020 | -33.9% | 1 | 6 (08/2020) |
| Black Monday | 10/19/1987 | 12/1987 | -33.5% | 4 | 20 (07/1989) |
| Inflation Bear | 01/2022 | 10/2022 | -25.4% | 10 | 15 (01/2024) |
It is one thing to say you can except the risk but quite another to hang on for 6,20,33,56 or 280 months to make a new high.
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