That's it: Global stocks are officially in a bear market.
On Thursday, the MSCI all-country world index closed down 20% from its recent high to meet that technical definition.
The index tracks large and mid-cap stock performance across 23 developed and 23 emerging countries. It peaked last May but fell about 1% on Thursday.
We'd note that the index had touched bear-market territory, but it has now closed down more than 20% from its peak.
Earlier on Thursday, global markets continued to sell off, with the Dow falling by as many as 400 points during the trading session. European stocks fell to their lowest level since September 2013.
The collapse into a bear market was accelerated in August and September, and then again in the first six weeks of 2016. There are many reasons investors could give for freaking out and dumping stocks, including the oil crash and turbulence in China's economy.
Also, central banks worldwide spooked investors as they cut interest rates, some into negative territory, and announced more stimulus measures to boost domestic demand, indicating that pockets of the global economy are in distress.
Wrote Brad McMillan, chief investment officer for Commonwealth Financial Network:
Given the very real challenges around the world, we can probably expect more damage to the markets. What we likely won't see is continued economic damage or a U.S. economic crisis. The very factors that are battering the markets are, in large part, positive for the real economy.
US stocks had the worst start to a year ever in 2016 and remain in correction — a 10% drop from recent highs, with the tech-heavy Nasdaq less than 2% away from a bear market.
McMillan continued:
In 2008, the real economy was broken, with consumers borrowing money they did not have to buy assets they could not afford at prices that made no sense. Today, we have jobs, savings, and rational prices in the real economy. A downward adjustment in financial values won't change that, and that same solid foundation will eventually allow the market to recover as well.

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