A bear market is a market condition in which the prices of securities are falling, and widespread pessimism causes the negative sentiment to be self-sustaining. It is typically a period of declining stock market prices that is greater than a normal market correction.
A bear market is a period of time in which stock prices are falling and investors are pessimistic about the future of the stock market. It is the opposite of a bull market, which is a period of time in which stock prices are rising and investors are optimistic about the future of the stock market.
The term “bear market” is derived from the way a bear attacks its prey. A bear will swipe its paw downward, which is similar to the way stock prices move during a bear market.
A bear market is typically characterized by a prolonged period of falling stock prices, usually lasting for several months or more. During a bear market, investors become increasingly pessimistic about the future of the stock market and begin to sell their stocks. This selling pressure causes stock prices to fall further, creating a downward spiral.
The length and severity of a bear market can vary greatly. Some bear markets may last only a few weeks, while others can last for several years. The severity of a bear market is usually measured by the percentage decline in stock prices. A bear market is typically considered to be a decline of 20% or more from the previous peak.
Investors can protect themselves from the effects of a bear market by diversifying their investments and avoiding speculative investments. It is also important to remember that bear markets are a normal part of the stock market cycle and that they are usually followed by bull markets.