How Often Does a Routine Dip Become a Bear Market?

When the market starts dropping, you will hear from a lot of sources “this is the beginning of the next big one!” However, that’s not been historically true.

Guggenheim found that, since 1945, there have been 84 routine pullbacks, most of which bounced back quickly:

II.    65% never became 10-20% corrections

III.   68% of corrections didn’t breach 20-40% bear markets

IV.   66% of bear markets never dropped > 40%

VI.   Overall,< 4% of routine pullbacks turn into 40%+ crashes

The majority of declines fall within the 5-10 percent range with an average recovery time of approximately one month, while declines between 10-20 percent have an average recovery period of approximately four months. Pullbacks within these ranges are not uncommon, occurring frequently during the normal market cycle.

Source: https://www.guggenheiminvestments.com/mutual-funds/resources/crucial-conversations/putting-pullbacks-in-perspective

Oh, and (for what it's worth), 0% of Bear Markets have been permanent.

Pullbacks happen regularly, but most of them are more bark than bite.