Bear Market

A bear market refers to a prolonged period of declining asset prices, typically by 20% or more from recent highs, and is characterized by widespread pessimism and negative investor sentiment. Bear markets can occur in any asset class, including stocks, bonds, commodities, or real estate. They are often triggered by economic downturns, high inflation, rising interest rates, or other negative macroeconomic factors. During a bear market, investors are more likely to sell off assets, leading to further price declines and reinforcing the downward trend. Bear markets can last for months or even years, and they present significant challenges for investors.

Example

The global financial crisis of 2008 led to a bear market in global equities, with major stock indices falling by more than 20% and taking several years to recover.