Bear market

A bear market is a phase in the life of a financial market, such as a stock market, in which the prices of most securities fall consistently, as reflected by a downward movement of one or more key stock market or other financial market indices. Investors, anticipating further losses, are thus motivated to sell, and the pessimistic sentiment may feed on itself in a vicious circle.

Related Topics:
Financial market - Stock market - Securities - Stock market - Vicious circle

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Prices fluctuate constantly on the open market; a bear market is not a simple decline, but a substantial drop in the prices of a range of issues over a defined period of time. By one common definition, a bear market is marked by a price decline of 20% or more in a key stock market index from a recent peak over at least a two-month period. However, no single definition of a bear market exists. Indeed, a long bear market may include periods of temporary price increases, known as a bear market rally.

Related Topics:
Stock market index - Bear market rally

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Declines in the index of below 15-20% are generally referred to as "corrections" or "adjustments" in the market. An exaggerated bear market characterized by panic selling is called a stock market crash. The opposite of a bear market is a "bull market."

Related Topics:
Stock market crash - Bull market

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