--- title: Stocks Are Rallying. Does That Mean the Bear Market Is Ending? description: "Bear markets rallies of 5% or more are common —\_but they don't mean stocks are fully recovering yet. Here's what investors should do now." authors: - name: Mallika Mitra role: Contributing Editor url: https://money.com/author/mallika-mitra/ bio: Mallika Mitra is a contributing editor for Money, based in Chicago. She has covered investing and retirement for seven years and her work has appeared in CNBC, Bloomberg, Kiplinger, AARP, Barron’s, Bankrate, The Daily Upside, ETF.com, The Bond Buyer, PLANADVISER, PLANSPONSOR and Investopedia. education: Craig Newmark Graduate School of Journalism at CUNY Kalamazoo College at_money_since: 2020 articles: 395 covers: - Economy and Politics - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Retirement - Shopping - Taxes - Technology also_seen_in: - CNBC - Bloomberg - Kiplinger - Barron's - Bankrate - WGN-TV - CBS News Radio - This Morning With Gordon Deal - Everyone's Talkin' Money social: - https://twitter.com/mitra_mallika - https://www.linkedin.com/in/mallika-mitra-4577a386/ editors: - name: Brad Tuttle role: Senior Editor url: https://money.com/author/brad-tuttle/ bio: Brad Tuttle is a former senior editor at Money with over 10 years’ experience covering a vast number of personal finance topics, including careers, cars, travel, budgeting, investing, insurance, credit cards, consumer psychology, real estate, banking, and shopping and deals. education: Columbia University School of Journalism, MS at_money_since: 2014 articles: 366 covers: - Economy and Politics - Banking - Business - Career Advice - Credit - Credit Cards - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Retirement - Shopping - Taxes - Technology social: - https://twitter.com/bradrtuttle - https://linkedin.com/in/brad-tuttle-834b225 former_staff: true published: '2022-07-20T16:24:21.000Z' modified: '2024-01-10T17:35:49.000Z' section: Economy and Politics tags: - News - stocks word_count: 521 canonical: https://money.com/stocks-rallying-bear-market-ending/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Photo collage of a bear in a New York Subway sitting in-front of an Exit sign with a stock market chart in the background](https://img.money.com/2022/07/News-2022-Bear-Market-Exit.jpg?crop=0px%2C127px%2C1690px%2C951px&quality=85) The stock market is rallying — but investors shouldn't celebrate just yet. The [S&P 500](https://money.com/how-to-invest-in-sp500/), an index commonly used to measure how [stocks](https://money.com/how-to-buy-stocks/) are doing overall, jumped 2.8% Tuesday, while the Dow Jones Industrial Average and the the Nasdaq Composite closed up 2.4% and 3.1%, respectively. Tuesday marked the largest one-day percentage gains since June 24 for all three indexes, and a welcome relief for investors. The S&P 500 was up around 0.9% during trading midday Wednesday as well. While financial markets for much of the last two years were buoyed by stimulus money from the government and near-zero interest rates, stocks have been struggling after hitting their peak in January amid [sky-high inflation](https://money.com/inflation-change-investing-strategy/) and [rising interest rates](https://money.com/fed-rate-hike-investor-advice/). The S&P 500 fell into a [bear market](https://money.com/investing-moves-bear-market-stocks/) in June and was still down around 18% for the year at Tuesday's close. The truth is that rallies like Tuesday's during an overall downturn are common, and they certainly don't mean stocks have [hit bottom](https://money.com/have-stocks-hit-bottom-2022/) or are going to recover all their losses in a hurry. "Bear markets are typically thought of as periods of relentless declines in the market where stocks do nothing but trade lower," analysts at Bespoke Investment Group wrote in a note to clients Tuesday. "The reality of bear markets, though, is that they often include periods of extreme countertrend rallies, sucking investors in along the way." ## What past stock market downturns tell us If history repeats itself, rallies as big as even 5% or more don't necessarily mean the bear market has bottomed. Look at the dot-com bust. Between the S&P 500's peak in March 2000 to its low in October 2002, the index lost 49% — but along the way it saw 11 different rallies of 5% or more, according to Bespoke. It's a similar story around the financial crisis of 2008: The S&P 500 experienced 12 different rallies of at least 5% between October 2007 and March 2009, when it lost 57% of its value. Bespoke even points to early 2020 when COVID-19 first hit the U.S. and stocks crashed. There were three rallies of at least 5% between mid-February and late-March, during which the index overall lost more than one-third of its value, the investment firm found. "Just when an investor thinks the market may be starting to turn, new positions quickly turn into losers," the analysts write. "The last three periods of major declines for the stock market since 2000 illustrate this trend." What's the takeaway for investors? [Financial advisors](https://money.com/how-to-choose-a-financial-advisor/) tend to recommend that investors don't try to time the market, as it's hard enough for professional traders to do that successfully. Instead, if you're looking to benefit from an eventual stock market recovery, consider [dollar-cost averaging](https://money.com/bear-market-new-investor-tips/#:~:text=GET%20STARTED-,Start%20dollar%2Dcost%20averaging,-So%2C%20how%20exactly), which entails investing a set amount of money at various intervals. For example, if you have $10,000 saved up that you want to put into the market, you could invest $1,000 every other week until it's all invested. ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/stocks-rallying-bear-market-ending/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Economy and Politics", "item": "https://money.com/economy-and-politics/" }, { "@type": "ListItem", "position": 3, "name": "Stock Market", "item": "https://money.com/stock-market/" }, { "@type": "ListItem", "position": 4, "name": "Stocks Are Rallying. 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