How Long Do Market Declines Typically Take to Recover?

When investors think about market risk, they often focus on volatility or average returns. But those measures do not reflect how investing actually feels. The moments that test discipline are periods when markets fall and portfolios are below their prior highs. A more practical way to think about risk is through drawdowns.

What is a drawdown?

A drawdown measures how far the market falls from its most recent peak. If a portfolio reaches $100,000 and later drops to $85,000, that is a 15% drawdown, even if the original investment was much smaller. In plain terms, a drawdown answers the question:

“How far am I down from when things were going well?”

That is when uncertainty rises, and poor decisions are most tempting.

How long do drawdowns last?

Using nearly a century of U.S. stock market data, each historical drawdown was measured from market peak to trough, and then from trough back to full recovery. The table below shows how long recoveries have typically taken, grouped by the depth of the decline. Recovery times are measured in trading days (about 252 trading days per year).

Trough-to-Recovery Time by Drawdown Size

(Measured in trading days; 252 ≈ 1 year)

Market decline	Number of historical events	Median recovery	75% recovered by	90% recovered by	Worst case
Up to 10%	993	2 days	4 days	11 days	~126 days (~6 months)
10%–20%	15	65 days (~3 months)	~4 months	~6 months	~12 months
20%–30%	9	270 days (~1.1 years)	~2.4 years	(~3.5 years)	~3.55 years
More than 30%	7	435 days (~1.7 years)	~2.5 years	~5.5 years	~15 years

What this tells us

• Small declines are common and brief. Most drawdowns are under 10%, and historically they have recovered in days or weeks, not years.

• Moderate declines take patience, not panic. Even 10–20% market declines have typically recovered within months.

• Declines of 20% to 30% usually take one to two years to reverse.

• Severe bear markets are very rare but dominate the narrative. Drawdowns greater than 30% occur extremely infrequently, and account for the longest and most emotionally difficult recoveries.

  
  

The practical takeaway

Market declines are uncomfortable, but history shows that recovery is the norm, not the exception. Understanding drawdowns—and how long they have taken to heal in the past—helps set realistic expectations and reduces the temptation to make costly decisions at precisely the wrong time.

Risk is not just how much markets move, but how long investors must wait for recovery.

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Dr. Andy Lawson is the principal of Freshfield Investments, a Registered Investment Advisory firm in Plano, Texas serving clients locally and nationwide. Freshfield provides investment management and financial planning as a fee-only, fiduciary. To book a virtual or in-person complimentary consultation, please visit our Contact page.

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Data source: Kenneth R. French Data Library, Tuck School of Business, Dartmouth College