#MarketRebound The stock market has historically ebbed and flowed. Sometimes it might go down for various reasons, but stock prices have historically rebounded. A rebound is when the market begins moving in a positive direction after a decline in stock prices. The stock market saw a downturn (decline) and subsequent rebound in 2020, as a result of the COVID-19 outbreak and the resulting economic turmoil. Some market forces might cause the market to rebound even when the rest of the economy might not be performing as well. For example, the rebound after the initial COVID-19 outbreak occurred while unemployment was still high.
Example
The stock market historically has rebounded after every economic downturn. For example, consider the events of 2007–2008, when the stock market declined and the country went into a recession in the aftermath of the housing crash. Investors lost a lot of money, but the market rebounded. Analysts have determined that it took about four and a half years to overcome the market downturn. Let’s say an investor had put a lump sum of money into the stock market on its highest day before the downturn in 2007. Had that investor kept their money in the market, they would have recovered all of their losses within four and a half years because the stock market experienced a rebound. It is not guaranteed that the stock market will always rebound from a downturn.