Bear Market

A bear market is when a market experiences prolonged price declines. It typically describes a condition in which securities prices fall 20% or more from recent highs amid widespread pessimism and negative investor sentiment. Bear markets can occur in any asset class—stocks, bonds, real estate—and are often accompanied by economic downturns, recessions, or even depressions. During a bear market, investors must be cautious, but opportunities still exist for profit in short selling or by purchasing defensive stocks such as utilities or consumer staples which tend to be less volatile.