S&P 500 Deep Bear (-30%)
Forward returns from extreme drawdowns
Drawdowns of 30%+ are rare and concentrated: 1929-32, 1937, 1973-74, 2000-02, 2008-09, 2020. These represent genuine economic crises or systemic dislocations. Buying at these levels has produced exceptional long-term returns in every case.
| Date | 1M return | 1Y return | 5Y return |
|---|---|---|---|
| 1929-10-29 | +6.0% | -16.1% | -54.6% |
| 1932-11-23 | -4.1% | +48.9% | +65.1% |
| 1937-10-05 | -10.8% | +0.1% | -27.2% |
| 1970-05-21 | +6.8% | +40.1% | +25.3% |
| 1974-08-14 | -15.0% | +12.0% | +37.5% |
| 1987-10-19 | +8.1% | +22.9% | +81.2% |
| 2001-09-17 | +5.7% | -15.9% | +27.2% |
| 2008-10-06 | -4.8% | -0.2% | +56.6% |
| 2020-03-20 | +18.7% | +71.0% | +147.8% |
What history says
Editorial commentary written by ALAN analysts. Figures cited below are analyst-authored context — they are not derived from the chart above and may reflect different windows or sources.
Every instance of a -30% drawdown since 1929 has been followed by positive 5-year returns, including those that ultimately fell further (2008 went to -57%).
Advisors who systematically rebalanced into equities at -30% in 2008 and 2020 delivered transformative client outcomes. This is where advisory value is proven.
The bottom is only identifiable in hindsight. Systematic deployment at -30% captures most of the recovery even if the market falls further before reversing.
Drawdowns this deep are where a staged-deployment rule matters most: consider committing rebalancing capital in fixed installments at pre-set levels rather than trying to call a bottom that is only visible in hindsight. Every -30% episode on record was followed by positive 5-year returns — including those that first fell further.