Bear market marks a year of rampage

NEW YORK -- The bear market that is wiping out investor wealth at an alarming rate turns 1 year old today. But nobody on Wall Street is celebrating.

What was considered an "average" or "garden variety" or "cub" bear a few weeks back, has spun dangerously out of control. In the current six-session losing streak, including Wednesday's 189-point plunge, the Dow Jones industrial average has plunged almost 1,600 points, or nearly 15% — wiping out more than five years of gains.

There is nothing average about this bear market.

The 37.1% drop suffered by the Standard & Poor's 500 index since hitting an all-time high of 1565.15 on Oct. 9, 2007, dwarfs the 31.5% average loss in the 10 bear markets in the post-World War II era, S&P says.

Investors are rattled because the financial crisis caused by the mortgage meltdown is deepening. Panic is spreading. Emotions are high. People's 401(k) balances are shrinking. There is a sense that stocks will never stop going down. Investors who haven't already fled the stock market, are asking, "Is it too late to get out?"

Those fears are not totally irrational. Gloomy headlines about an impending global recession, frozen credit markets, rising joblessness, weak retail sales and plunging asset prices are real.

To complicate matters, steps taken by governments around the world, such as hundred-billion-dollar rescue packages and Wednesday's synchronized interest rate cuts by major central banks, have yet to stop the bleeding or spur a recovery.

But in turbulent times such as these, perspective is needed to help investors make sound money decisions.

"It is useful to look back at the historical record to observe the duration and depth of earlier market pullbacks to set some baseline expectations for the present sell-off," Steven Foresti, head of investment research at Wilshire Consulting, noted in a report titled "2008 Stock Market Sell-off: Steeper than the Average Bear?"

How does this bear stack up against other megabears? How low is low? How long will it take to recoup losses?