A bear market occurs when the market experiences price declines for a prolonged period of time.
Understanding the Term
When the market trends downwards and asset values are declining, it is known as a “bear.”
During a bear market, it is common for investors to basically believe that a negative trajectory will continue, and they are more averse to risk than they might be in a bull market.
In finance, it is also referred to as a ‘bear’ when inflation decreases 20% or more from a recent peak.
A bear market is the opposite of a bull market.