Hi everyone - this is matt from match, strats, it's no secret that we are going through an excessively stressful and hectic time. I'm sure that there are many unanswered questions on your mind and i would like to do my part by providing you with information about previous economic recessions and bear markets. My hopes are that this knowledge will better prepare you for this turbulent period. To start, let's get some basic definitions out of the way.

How is a bear market different from an economic recession, although the two often go hand in hand, they are associated with different issues. A recession describes a slowdown in economic output and is generally defined as at least two consecutive quarters of decline in gross domestic product or gdp, which functions as a measure of economic health. On the other hand, a bear market describes a stock market decline of at least 20 percent as a result of negative investor sentiment. Based on these definitions, we are currently in a barren market, but not a recession to hopefully better understand what we are dealing with.

Let's take a step back in time: let's go all the way back to 1929.. Between september and october of 1929, the new york stock exchange collapsed. It was one of the most devastating stock market crashes in the history of the united states and signaled the beginning of the great depression. This bear market which lost over 80 percent, lasted just under three years and the recession for this time period lasted over four years.

This was followed by a 13.9 year period where the market returned 815 percent after world war ii. There were many veterans looking for a job, but the job market only had limited openings. This led to a six month period where the market dropped 22. Following this drawdown, the market went up in excess of 900 over the next 15 years, starting in november of 1968 market growth ended with a mild recession, accompanied by a relatively high inflation rate.

The bear market began just as richard nixon was elected president. After a tumultuous year of assassinations and riots, the weak economy added to a tense national atmosphere dominated by the growing u.s involvement in vietnam, the market rebounded over the next two and a half years following this short period of economic prosperity, was a two-year downturn where the Market lost over 40 percent. This bear market and recession was prompted by the 1973 oil crisis and president nixon taking us off the gold standard. Following this from july 1981 to november 1982, there was another recession which was caused by economic, stagflation and contradictory monetary policy.

Let's fast forward to october 19, 1987, also known as black monday, this infamous day, is when the stock market dropped over 20 percent. This short-lived three-month bear market experienced a maximum decline of 30 percent. The next 13 years made up all of these losses and then some by returning 816 percent, the next millennia got off to a rough start. When the dot-com bubble popped in march of 2000, this led to a two-year period where the market lost almost 45 percent.

Of its value, the next five-year period saw 100 growth, which brings us to the financial crisis of 2008.. Large financial institutions in the united states dragged the market down due to their large exposure to subprime mortgage loans, which failed when the housing bubble popped over the next 1.3 years. The market lost just under 51 percent of its value. The next bull market lasted roughly a decade, and that brings us to now the coronavirus.

This pandemic has caused the us market to drop over 30 percent at the time that i'm making this video. The only thing that i'm sure about is that nobody can be absolutely positive with what is going to happen next. The market may have already put in the bottom, and we could rally from here, or things could get worse much worse. Only time will tell historically speaking, this pandemic is unprecedented, but i do feel confident that there are better days ahead of us just like there was with every previous economic recession and bear market to be more statistically specific.

Since 1926, the typical bull market lasted just over nine years, with an average total cumulative return of 480 percent. Over the same period of time, the average bear market lasted 1.4 years with an average cumulative loss of 41. This indicates to me that there will be a great opportunity to buy into the market in the not too distant future. I want to emphasize that i am not a financial advisor and you should consult one before making decisions that impact your financial health.

I hope i was able to offer you some perspective and better prepare you for what we may still have before us thanks for watching. If you have any questions or comments, leave them below, if you learned anything or enjoyed the video hit, that like button and subscribe and as always may the odds be in your favor.