Bear Market
A bear market is a prolonged period of falling asset prices — conventionally defined as a decline of at least 20% from a recent peak — accompanied by widespread investor pessimism.
Bear markets in equities are typically defined by a 20% or greater drawdown from a prior high, sustained over at least two months. The term is also applied more broadly to any asset class experiencing a prolonged downtrend.
Bear markets are often triggered by economic downturns, rising interest rates, tightening credit conditions, or systemic shocks. They tend to be shorter but sharper than bull markets — driven by fear, which moves faster than greed.
During a bear market, many assets decline simultaneously as investors move to cash or safe-haven assets such as government bonds, gold, or certain major currencies (JPY, CHF, USD). Correlations between risky assets typically rise.
Trading in a bear market requires adjustment: long-only strategies underperform, and strategies that profit from falling prices (short selling, put options, inverse ETFs) can be appropriate for those with the skills and risk appetite.
TrustFinance provides safe-haven asset coverage and analysis during bear markets, and its broker reviews flag platforms with robust negative balance protection and client-fund segregation — important protections during volatile periods.