(1) The 2000-2002 bear market. The recovery time from this bear market took just four years, as judged by the dividend-adjusted version of the Dow Jones Wilshire 5000 index... (average that incorporates all publicly-traded U.S. stocks).
It was on Sept. 28, 2006, that the DJ Wilshire 5000 index surpassed its March 2000 high, almost exactly four years following the bear market low set on Oct. 9, 2002.
(2) The 1987 Crash. The recovery time from this crash, the worst in U.S. stock market history, took 17 months. It was on May 12, 1989, that the dividend-adjusted DJ Wilshire 5000 index surpassed its Aug. 25, 1987 high, less than a year and a half after the Dec. 4, 1987 low to which the stock market descended in the wake of the Crash.
(3) The 1973-1974 bear market. The recovery time from this bear market took just two years. By December 1976, the total-return version of the DJ Wilshire 5000 was higher than where it stood at the market's high in early 1973.
(4) The 1929 Crash and Great Depression. Because the DJ Wilshire 5000 index doesn't exist for those years, I turned to the stock series constructed by Jeremy Siegel, a finance professor at the Wharton School of the University of Pennsylvania, and author of the classic book Stocks for the Long Run. He shows that, for all intents and purposes, stocks on a total-return basis in late 1936 and early 1937 had risen back to their September 1929 high, before entering into another bear market. This puts the recovery time at a little more than four years from the stock market's July 1932 bottom.
Mark Hulbert suggests that it is the dividend-paying diversified index that makes the difference between a short recovery time and, for example, the QQQ (tech-oriented index) that still lingers 8 years later at 56% below its high. I could not agree more. Great article.