Bear Market
Basics
What it means
A market where prices are falling, usually defined as a drop of 20% or more from recent highs. Pessimism and selling dominate buying.
Example
In 2022 the S&P 500 fell from about 4,796 to 3,636, a 24% decline, meeting the common definition of a bear market.
Mistake beginners make
Beginners try to "buy the dip" in a bear market the same way they would in a bull market, catching falling knives all the way down because dips keep making new lows.
Related terms
- Bull Market — A market where prices are rising or expected to rise over a sustained period. Traders are …
- Trend — The overall direction price is moving over a period. Up trends make higher highs and highe…