What is Bear Market?
A market condition where prices fall significantly, typically by 20% or more, amid widespread pessimism.
A bear market is a period of declining asset prices, generally defined as a drop of 20% or more from recent peaks. It is marked by widespread investor pessimism, negative sentiment, and expectations of further losses. The term comes from a bear's downward-slashing paws. Bear markets often coincide with economic recessions or slowdowns.
During a bear market, fear and selling pressure dominate. Investors may seek safer assets like cash, gold, or government bonds—often called 'flight to safety.' Bear markets can be triggered by various factors, including economic shocks, rising interest rates, or geopolitical crises. Recovery times can vary significantly.