If a Stock Market Crash Happens, History Says This Is How Long It Could Take Investors to Recover
Yahoo Finance ·
Given that the S&P 500 ( ^GSPC -0.04% ) , Nasdaq Composite ( ^IXIC +0.29% ) , and Dow Jones Industrial Average ( ^DJI -0.49% ) are all trading just a few percentage points off record highs, some are worried things could turn south soon. And they're wondering: If a stock market crash is coming, how long might it take for my portfolio to recover? First, I want to get something pretty important out of the way. While a crash is always possible, don't assume one is around the corner based solely on the market setting record highs. It's a neat trick our minds play on many of us, but a market setting record highs isn't a particularly fragile situation. In fact, data says otherwise. Investment firm Dimensional Fund Advisors looked at stock market data from 1926 through 2022 and found that a year after a new record was set, the market was higher 81% of the time by an average of 13.7%. Still, a crash -- a decline of 30% or more -- could still come, so what does history tell us about how long it might take to recover if one does?
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