With the Dow Jones Industrial Average, Nasdaq Composite, and S&P 500 all hovering around 52-week lows the term "bear market" is gaining more attention.
The commonly accepted definition of a bear market is a 20% market decline from recent highs.
The tech-heavy Nasdaq is well into bear market territory. The index was down more than 29% compared with its November peak. And the S&P 500 is on pace to close in bear market territory.
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"Investors should be careful of getting too negative with all the talk about a bear market," said David Russell, vice president of market intelligence at TradeStation Group. "This is the best labor market in modern history and the economy is woefully short on everything.
"A new market is taking shape. It’s not necessarily a bear market – even if it feels like one."
S&P 500 bear market level
The S&P 500 needs to close below 3,837.25 to be in official bear market territory. As of 1:02 p.m. EST the index was ten points below that threshold.
When will a bear market end?
There's no rule for how long bear markets can last.
Typically, when researchers study bear markets, they pay the closest attention to S&P 500 index. For instance, the bear market that quickly unfolded when the pandemic began in the U.S. lasted 33 days, making it the shortest bear market since the Great Depression.
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Longest bear market in history
The longest bear market began in November 1973 and lasted 630 days, according to an analysis by Ned Davis Research. During that time, inflation was rampant in the U.S. and OPEC stopped importing oil into the U.S., resulting in a recession.
According to some analyses, the Great Depression, which lasted from 1929 to 1939, was the longest bear market. Other analyses break up the 10-year time frame into smaller segments of bear markets as opposed to one overarching one.
How long does the average bear market last?
The average length of the 26 S&P 500 bear markets since 1926 is around 9.6 months. The average S&P 500 decline over the course of those bear markets was more than 35%, according to Ned Davis Research.
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Should you buy or sell stocks during a bear market?
In general, panic buying or selling stocks isn't a winning strategy. Some market analysts say the best thing to do during heightened market volatility is nothing.
But if you've got extra cash on hand, consider buying "quality companies with high and stable earnings," said Geetu Sharma, founder and investment manager at AlphasFuture LLC based in Minneapolis.
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"Our portfolios are tilted towards quality and defensive sectors such as healthcare and staples that are likely to prove more resilient in this ongoing volatility."
These sectors tend to outperform others during recessions, though bear markets don't always coincide with recessions.
That said, "it is worth remembering that if we are headed towards a bear market – and for now, we don’t think we are – much of the damage from any potential bear market has likely already been inflicted on U.S. stocks," said Tim Holland, chief investment officer at Orion Advisor Solutions.
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Elisabeth Buchwald is a personal finance and markets correspondent for USA TODAY. You can follow her on Twitter @BuchElisabeth and sign up for our Daily Money newsletter here
This article originally appeared on USA TODAY: S&P 500 bear market level is close. What will that mean for stocks?