Imagine waiting for a city bus to take a ride across town. You’re not doing anything important, perhaps just going out to do some shopping. It’s 11:55 am and you are five minutes early to catch a ride at noon. According to the schedule, the bus should come every 15 minutes. As you wait, a few people are already waiting for the 12:00 bus, and more join in.

Noon comes and goes, but the bus is nowhere to be seen. Some people get annoyed and start making calls to inform others of their delay. A small group gives up and calls for taxis or rideshares. Since you have no urgent plans, you decide to wait for a while. Ten minutes pass, then 20, then 30. Finally, at 12:50, a bus arrives and begins picking up passengers. But now, due to the delay, and three missing buses, there's not enough room for everyone waiting at the stop. You consider waiting for the next bus. The question is…when will it arrive?

Perhaps there was some severe traffic congestion that held up every vehicle on the road. It is possible that the next three buses (the ones scheduled for 12:15, 12:30, and 12:45) could be coming along right behind this one. That assumes that the bus currently loading is the 12:00 that arrived 50 minutes late. The other possibility is that this is the 12:45 bus and it is only five minutes behind schedule. That would mean that something more substantial than traffic occurred, and maybe the three missed buses are never going to show up. You simply don’t know when the next one is coming.

There have been 27 bear markets (defined as a market decline of 20%) in the United States since 1928. This averages out to about one every three or four years. One extremely short bear market (only 33 days) occurred between February and March of 2020 when fear around the COVID pandemic caused a market drop (as measured by the S&P 500) of around 34%. Prior to that quick downturn, the most recent bear market had been the one that took place in 2009. This means there was a period longer than a decade (April 2009 through January 2020) when we didn’t see a single occurrence of something that we could reasonably expect to happen every three or four years!

Which brings us back to our cross-town bus. What if, like a bear market, the bus was something you didn't want to catch? What if, instead of waiting on the sidewalk, you were standing in the street and didn’t know when the next bus would come rumbling toward you? Would you step out after the last bus left and assume you should be safe for another 15 minutes? Would you be a bit more cautious and assume that the ones you missed couldn’t be far behind?

Now, putting aside history and arithmetic averages, there is no simple reason to expect that bear markets should come on any sort of schedule. There are some patterns worth considering though. The average length of a bear market is 292 days or 9.5 months. The most recent two came after the bull market that started in March of 2009, and lasted a record-breaking 11 years! The COVID-era bear market lasted only 33 days and the 2022 bear market lasted 361. If we consider that a historically long bull market ended with a historically short bear market, which was followed only about 9 months later by another more run-of-the-mill bear, it is easy to get the sense that the bear market buses may be catching up to their schedule.

As always, I am not predicting the next market move. My crystal ball is still in the shop. What I am suggesting is that it may not be a good idea to wait in the street to catch the next bus.