Market declines — A little history

Stock market declines are a natural part of investing, but they’re also the last things most investors want to experience. Here is some historical background to help you put market declines in perspective.

Types and frequency of stock market declines

Declines have varied widely in intensity, length and frequency. While in the midst of one, it’s been nearly impossible to tell if you’re seeing a slight dip in the market or the beginning of a more prolonged correction.
 

The table below shows how frequently declines in the Dow Jones Industrial Average have occurred since 1900. As you can see, while declines have varied widely in intensity, length and frequency, they have also been somewhat regular events.

Market downturns happen frequently but don’t last forever

S&P 500 Index (1954 – 2024)

Size of decline

-5% or more

-10% or more

-15% or more

-20% or more

Average frequency

About twice per year

About  once every 18 months

About  once every three years

About once every six years

Average length

46 days

135 days

256 days

402 days

Last occurrence

July 2024

July 2023

August 2022

January 2022

Sources: Capital Group RIMES, Stamdard & Poor’s. As of December 31, 2024. Average frequency assumes 50% recovery of lost value. Average length measures high to market low.

Past results are not predictive of results in future periods.

The indexes are unmanaged and, therefore, have no expenses. Investors cannot invest directly in an index. 

S&P 500 Index is a market capitalization-weighted index based on the results of approximately 500 widely held common stocks. 

The S&P 500 Index (“Index”) is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use by Capital Group. Copyright © 2025 S&P Dow Jones Indices LLC, a division of S&P Global, and/or its affiliates. All rights reserved. Redistribution or reproduction in whole or in part is prohibited without written permission of S&P Dow Jones Indices LLC.


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Market perspective

Don’t forget the fundamental principles of investing, especially during difficult times.
 
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