Markets· August 16, 2026 at 01:50 p.m.
Historical Analysis Suggests Potential for Bear Market by 2026: Preparing Investment Strategies
Key takeaways
- Bear market every six years on average since 1970
- Shiller P/E ratio near all-time high
- Potential bear market by 2026
Since 1970, there has been an average bear market every six years, with the last one occurring in 2022. However, the market's unpredictable nature means that the next bear market could occur within the next two years or even later. The Shiller price-to-earnings (P/E) ratio, currently at 42, is near its all-time high, which was recorded in November 1999 before a bear market ensued.
According to an analysis by The Hartford Funds, the 2000 bear market lasted about 540 days and resulted in a 37% market drop. The 2002 bear market lasted more than 275 days and saw the market fall 33%, while the 2007/2008 bear market spanned over 400 days and led to a 51% market drop.
To prepare for potential bear markets, investors should identify stocks with abnormally high P/E ratios, diversify their portfolios, consider exchange-traded funds (ETFs), and look for bargains on undervalued stocks.
In 2009, a 'Double Down' signal flashed for a little-known chipmaker called Nvidia. Investing $5,000 then would result in over $2,900,000 today.
