The tip to the record-long bull market is now a actuality. Nevertheless, getting into a bear market does not all the time imply a recession is upon us, historical past exhibits.

This week, the S&P 500 and the Dow Jones Industrial Common entered bear markets, ending their historic 11-year bull runs.  A bear market marks a 20% decline from all-time highs. As a forward-looking mechanism, the inventory market normally sends warnings in regards to the economic system earlier than shrinking development exhibits up within the information.

Nonetheless, there have been a few cases the place recessions did not accompany earlier bear markets, in accordance with information from LPL Monetary going again to the S&P 500's inception.

"Now the excellent news isn't all bear markets happen in recessions; in actual fact, when the economic system has averted recession, shares have bottomed proper round down 20% over the previous a number of bear markets," mentioned Ryan Detrick, LPL Monetary's senior market strategist.

In 1987, the S&P 500 tanked 22% within the notorious Black Monday crash, struggling its largest...