Just as the name implies, bloodletting occurs when the stock market tanks suddenly and rapidly.
To describe it as a temporary bear market is to, uh...put it mildly. Going back to the Middle Ages, medical “experts” would purposely drain blood from a patient (or use Socialist leeches) to try and get rid of anything bad, and keep the system in the proper balance.
Could that be what occurs during a stock market bloodletting?
Investors are faced with the difficult choice between riding out the storm or getting the heck out and...selling. By the time the market starts to decline, it is usually too late to exit without any losses. Those who are glass-half-full types see a bloodletting as the perfect time to buy up stocks at bargain prices, if the companies behind them show strong financials.
No one knows how long a bear market with or without bloodletting will continue. The Great Recession lasted about 19 months from 2007-2009 before stock prices started to rebound.