Market Bottom Recovery

by Doug on Sep.01, 2009, under Financial

Average annual returns of the S&P 500 Index after declines of 20% or more.

Market Bottom	1 yr later	3 yrs later	5 yrs later	10 yrs later
2002 Sept	22.2%	14.7%	13.4%	N/A
1987 Nov	18.8%	11.8%	13.4%	15.3%
1982 July	51.8%	21.3%	24.4%	14.8%
1974 Sept	32.0%	15.0%	11.5%	10.1%
1970 June	37.1%	13.0%	4.6%	4.3%
1962 June	26.7%	15.4%	10.6%	6.9%

From T. Rowe Price and S&P 500 Index data.

The data shows us the biggest recovery is one year after the bottom was reached. The implication is if you are trying to time the market and miss the bottom, you will miss a good gain.