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Classification of Bear Markets

Classification of Bear Markets

| March 16, 2020
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Goldman Sachs analyst Peter Oppenheimer analyzed bear markets going all the way back to 1835 and classified them as either “structural”, “cyclical” or “event-driven”.  Through his research, Oppenheimer had some good news and some bad news about the current slump.  First the bad:  “Event-driven” bear markets, such as the current coronavirus pandemic, on average, result in 29% declines.  That’s bad, considering that we’re not to that level yet.  The good news, Oppenheimer says, is that such bear markets generally regain their previous levels within 15 months.  The other two types of bear markets, structural and cyclical, generally see drops of 57% and 31%, respectively, and take much longer to recover.

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