Markets · Issue 02
Minus 86, then 57, then 49. The modern crash is not 1929.
S&P 500 cycle drawdowns, price. 1929–32 −86.2%. 2007–09 −56.8%. 2000–02 −49.1%. 2020 −33.9%. 2022 −25.4%. Hartford’s 20% census averages −35%. That average is a slice, not the Depression.
- 011929–32cycle, to Jun 193286.2
- 022007–091,565.15 → 676.5356.8
- 031937–38cycle54.5
- 042000–021,527.46 → 776.7649.1
- 051973–74Hartford/NDR48.2
- 061968–70Hartford −36.06%36.1
- 07202033 days33.9
- 081987Hartford −33.51%33.5
- 092022Hartford −25.43%25.4
- GFC, 9 Oct 2007 – 9 Mar 2009
- −56.8%
- 1929–32 cycle
- −86.2%
- 2020, 33 days
- −33.9%
- Hartford/NDR average, 20% episodes
- −35%
The average bear is a 20% slice. The crash is the whole hill.
Hartford/Ned Davis, March 2025: 28 episodes of −20% or more since 1929, average −35.24%, average 289 days. That is a useful heartbeat. It is not 1929. It is not 2008. Those two are why people remember crashes. This rank is the cycle depth, largest first. 2022 at −25.4% is a bear. It is not a crisis. 2020 at −33.9% was a crisis in the real economy and a 33-day event in the tape. Depth is not duration. Pair with the bubble: the wait is the other axis.
Minus 57 is the modern ceiling, until it isn’t
Every post-war crash on this wall except 1929 and 1937 sits at or under 57%. That is a sample, not a law. A sample of nine is how you get surprised. The investing error is to treat −35% as the stress test because it is the NDR average, or to treat −86% as the base case because it is the poster. Size for −57% if you have a job and a horizon. Size for −86% only if the mandate says so. Do not size for −25% because 2022 felt long.
The long view is that 2026 is not a row
As of 4 September 2026 the S&P has not printed a 20% close-to-close episode to add. CAPE near 42 is the other page. What would change this wall: a close 20% below the last high. Until then the rank is history, and history is not a forecast.
Investing lens
Horizon Full cycle · Educational, not advice
The modern crash ceiling is the GFC, not 1929 and not 2022. Underwrite −57% in a mandate that has to stay invested. Do not underwrite −25% as the worst case.
Where the map points
- A written −20% / −40% / −57% playbook
- Avoid a 2022-shaped memory as risk policy
- Cash and quality duration as dry powder, sized for 48 months not 5
- Nothing that needs 1929 to never happen
What can break it
- A new cycle deeper than 2008
- A 2020-shaped V that makes the playbook look timid
- Mixing NDR 20% slices with cycle depth
CHART does not recommend securities, funds or trades. Figures can be revised by their publishers. Do your own research and consider regulated advice before allocating capital.
Sources
Every headline number traces to a named publisher. Contextual sources inform the essay, not the key stat.
- 01PrimaryHartford Funds / Ned Davis Research2025-0310 Things You Should Know About Bear Markets
S&P 500 close-to-close declines of 20% or more, 1929–2024. As of 31 Mar 2025. Average −35% across 20% episodes. Cycle depths (1929 −86%, 2008 −57%) are a different ruler, used on our crash bubble.
- 02PrimaryReuters2013-03-28S&P 500 closes above 2007 peak
28 Mar 2013 close 1,569.19, first close above 9 Oct 2007’s 1,565.15.
- 03CorroboratedNPR2013-03-28S&P 500 Closes at a Record, Recovering from 2008 Crash
Same 28 Mar 2013 reclaim of the October 2007 high.
- 04CorroboratedReuters2024-01-19S&P 500 recoups 2022 high
19 Jan 2024 reclaim of the 3 Jan 2022 peak after the 2022 bear.
- 05PrimaryPBS / NPR2020-08-18S&P 500 erases coronavirus-crash losses
18 Aug 2020 close above the 19 Feb 2020 peak of 3,386.15. Trough 2,237.40 on 23 Mar.
- 06PrimaryFederal Reserve History1929Stock Market Crash of 1929
Dow 381.17 on 3 Sep 1929 to 41.22 on 8 Jul 1932 (−89%). Nominal high recouped 23 Nov 1954.
Keep reading
The deeper the crash, the longer the wait. Except twice.
S&P 500 price, peak to trough versus months from the low back to the old high. 1929 is a different animal. 2020 is the other exception: −34% and whole in five months. 2022 was −25% and fifteen. There is no 2026 crash on this wall.
5 mo
2020: trough to prior peak (price)
Five months, or twenty-two years
Months from the S&P 500 closing low back to the prior closing high. 2020: 5. 1982: 3. 2022: 15. 2008: 48. 1929: 267. Price only. Dividends would have you whole sooner. The newspaper would not.
48 mo
2009 low to 28 Mar 2013 high
CAPE is 42. It has only been higher once.
Shiller via Multpl: January 2000 43.8, the record 44.2 in December 1999. 2 September 2026: 41.93. January 2009: 15.2. A high CAPE is not a crash date. 2007’s crash arrived from 27.
41.93
Shiller CAPE, 2 Sep 2026 (Multpl)
The year stocks and bonds occupied the same quadrant
Each bubble is a calendar year. X is Damodaran’s S&P total return. Y is his 10-year Treasury. Size is gold. 2008 is the upper-left hedge. 2022 sits on the 45-degree line, both down 18%.
−18.0 / −17.8
S&P and 10-year Treasuries, 2022
2022 is the worst 60/40 since 1937. 2008 was kinder.
Damodaran S&P 60 / 10-year Treasury 40, calendar years. 1931 −27.3%. 1937 −20.7%. 2022 −18.0%. 2008 only −13.9%, because the 40% returned +20%. The worse equity year was not the worse mix.
−18.0%
60/40 in 2022, Damodaran splice