Bear Market
A market condition where prices decline 20% or more from recent highs.
Definition
A bear market is a condition in which securities prices fall 20% or more from recent highs amid widespread pessimism and negative investor sentiment. Bear markets are often associated with declines in an overall market or index like the S&P 500, but individual securities can also be considered in a bear market if they experience a 20%+ decline. Bear markets can be triggered by economic recessions, geopolitical crises, pandemics, or bursting of asset bubbles. The average bear market lasts about 9.6 months, compared to the average bull market of 2.7 years. Historically, bear markets have been followed by strong recoveries.
Related Terms
Bull Market
A market condition where prices are rising or expected to rise, typically 20%+ from recent lows.
MarketsMarket Correction
A decline of 10% or more in the price of a security or market index from its recent peak.
EconomyRecession
A significant decline in economic activity lasting more than a few months.