Historically, 5% drops in the S&P 500 occur about 3–4 times per year.
The average recovery time ranges from 2 weeks to 3 months depending on macroeconomic conditions.
Here are some key stats:
- Since 1980, there have been over 90 drops of 5% or more.
- In 68% of the cases, the index returned to its previous high within 60 trading days.
- Drops that occur during election years tend to recover faster.
This post is part of our “Market Patterns” series. Stay tuned for more insights.