What Is a Bear Market? Definition and How to Invest During One
The words “bear market” strike fear into the hearts of many investors, but these deep market downturns are unavoidable. They also tend to be relatively short, especially compared with the duration of bull markets, when the market is rising in value. Bear markets can even provide good investment opportunities.
What is a bear market?
A bear market is defined by a prolonged drop in investment prices — generally, a bear market happens when a broad market index falls by 20% or more from its most recent high. The reverse of a bear market is a bull market, characterized by gains of 20% or more.
While 20% is the threshold, bear markets often plummet much deeper than that over a sustained period. Although a bear market may have a few occasional…
