A Bear Market is a condition in the financial markets where the prices of securities, such as stocks, are falling or are expected to fall. It is typically characterized by a decline of 20% or more from recent highs over a sustained period, usually lasting several months or longer.
Bear markets can occur in various asset classes, including stocks, bonds, real estate, and commodities. They are often driven by a combination of factors such as economic downturns, investor pessimism, declining corporate profits, rising unemployment, or geopolitical events.
During a bear market, investor confidence is generally low, and there is a widespread expectation that the market will continue to decline. This often leads to a self-fulfilling cycle where investors sell off assets to avoid further losses, which in turn drives prices down even further.
Bear markets are considered the opposite of bull markets, where prices are rising, and investor sentiment is positive. While bear markets can be challenging for investors, they are also viewed as opportunities to buy undervalued assets in anticipation of a market recovery.
