The Difference Between A Bull And Bear Market

Bear Market

A declining market is referred to as a bear market. If a market has lost 20% or more from recent highs, it is generally viewed as an actual “bear” market. Share prices are continually dropping in a bear market.

During a bear market, the economic growth slows down, and unemployment grows as businesses cut staff. As a result, investors anticipate the declining pattern will likely continue, perpetuating the downward spiral.

Rather than buying into the market, investors are looking to sell, preferring the security of cash or fixed-income instruments. As a result, it’s a sellers’ market. Bear markets may last anywhere from weeks to years. The Great Depression was the first and most well-known bear market. Other instances include the dot-com bubble of 2000 and the housing crisis of 2007–2008.