Bear market: What historically happens next

Yahoo Finance's Brian Sozzi sheds light on how the market has performed historically after a bear market and why the future may be brighter for stocks.

Video Transcript

JULIE HYMAN: It's been an ugly year so far for stock markets. Major indices is all having their worst start of the year In several decades. The good news, stocks usually go back up, eventually. That's where we find Sozzi's Takes. How eventually Soz?

BRIAN SOZZI: Well, I think just doing the math here, Julie, we all should still be alive, so that's good. And I realized I've probably been a little too downbeat on my takes lately. So here's a dose of morning optimism. This comes via lot of data-crunching by a friend of the show, Keith Lerner, over at Truist.

Two stats first. He's noting the S&P 500 has been higher three years later in eight out of nine cases, in which the index has fallen 20% or more, from an all time high, going back to 1957. He also notes stocks have sharply regained ground a year after falling 20% or more from a high, so a year after. That increase has been about 15%, seven times. The bottom line is here.

And to your point, Julie, yes. And this also happens to be my take over time and miles. [INAUDIBLE] will like this one very much. Stocks do tend to go higher. And that is me being happy Soz with my Ray-Bans on. Over time, these extremes that we live in, like right now, high periods of inflation, rising interest rates, over time these things even out, or just flatten out and ultimately, once those things do even out, serve as a decent backdrop for stock prices over time.

BRAD SMITH: The old, adage it's not timing the market, it's time in the market. But at the same time, if you're a person that's looking to retire right now too, you got to wonder how that's impacting some people too, in their retirement, being--

BRIAN SOZZI: Just live an extra eight years, Brad. Just live an extra eight years, that's what you got to do.

BRAD SMITH: That's all. Alright, I'll call up Tony Stark, get that arc reactor flowing. So I appreciate it here on the day--