Bear Market
A period in which prices are generally falling and pessimism dominates, often defined as a decline of 20% or more from recent highs.
A bear market is the opposite of a bull market — the broad trend is downward, and fear tends to drive selling. The name evokes a bear swiping its paw downward.
Bear markets are uncomfortable but are a normal part of market cycles. For long-term investors using a SIP, falling prices mean buying units more cheaply.
Key points
- Sustained falling prices and pessimism.
- Often defined as a 20%+ drop from highs.
- A normal part of market cycles.