Early in 2008, the stock market plummeted due to bank credit concerns. From its October 2007 high, the NASDAQ dropped 23%, the S&P 19% and the Dow 18%. Technically, a 20% fall constitutes a bear market.
Although only the NASDAQ went into bear territory, investors panicked and sold their stocks in anticipation of the looming recession. By May, the stock market gained back almost all its losses.
