So how long could a prolonged market downturn go on?
The simple answer is that no one knows.
“Markets don’t go up in a straight line — they never have,” Brunnock said. “The markets can and will act erratically at times – they always have.”
For that reason, he said, the market pays an equity risk premium. Having a strong stomach is the cost for being an investor in the market.
Looking at more than just this moment, Brunnock said, the lack of volatility in the markets in 2017 was “simply remarkable.”
According to data from LPL Research and the St. Louis Federal Reserve, the biggest drop in the S&P 500 amounted to just 2.8 percent, Brunnock said. That was the smallest decline since 1995. The average intra-year pullback for the S&P 500 was 13.6 percent, he said.
“If we are in fact headed for a bear market – which can be defined as a peak-to-trough decline of 20 percent or more in the S&P 500 index – the good news is that it usually doesn’t last too long,” Brunnock said.