Bear markets have to end some time. But investors would do well to remember that many seeming bear-market exits prove to be a false dawn.
Sam Stovall, chief investment strategist at CFRA, noted media hoopla over the Nasdaq-100’s NDX entry into a new bull market on March 29, after closing more than 20% above its bear-market low set on Dec. 28 — a pullback that saw the tech-concentrated index drop 35.6% from peak to trough. As shown in the table, there have been eight bear markets for the Nasdaq-100 since its inception, Stovall said. And half of those bears saw bogus bottoms, with 20% advances off of the greater-than-20% declines subsequently eclipsed as the Nasdaq100 then fell to even lower lows during the bear markets of 1998, 2000-02, 2007-09, and 2021-23.
The S&P 500, the U.S. large-cap benchmark, has yet to exit the bear market it entered last year after sliding from an record close in early January 2022. The Dow Jones Industrial Average DJIA exited its bear market in November.