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Contrastingly, during the Great Depression following the market peak in 1929, failures in banking and a series of misguided tariffs compounded economic distress, leading to a decline of about 83% over three years. Recovery took nearly two decades, culminating in a massive market rally during World War II.
Periods of substantial market decline, like the financial crises in 1973-74 and 2008, provide further illustration of resilience. Despite significant dips—in some instances, falling up to 50%—the market historically tends to recover, exemplifying the cyclical nature of economics.