bear market
a market that is continually going down for an extended period of time
It can be any market, such as stocks, precious metals, real estate, or any asset class. The stock market is considered a bear market if it declines by 20% or more. A bear market usually happens when the economy is in a recession: investors tend to sell because they are anticipating losses. A fast inflation can also lead to a bear market. Indeed when inflation hits prices so strong that they no longer reflect the companies’ actual earnings, investors anticipate a correction of overvaluation and sell while prices are still high. In any case, all this selling causes a drop in prices, which in turn scares more and more investors (concerned about their return on investment), leading to more selling and further drop in prices. The vicious circle is continually auto-fueled.
A bear market is the opposite of a bull market.
bearish is the adjective derived from bear market. For instance, a bearish investor is an investor who believes that the current market is a bear market. By extension, it is sometimes used as a synonym of pessimistic.
Find these terms in Shortoncashflow’s following entries:
- Investing in property without buying and managing property
- Where is the Market Headed?
- My YTD stock returns, all pain, no gain
- This Rally Is Devastating my Brokerage Account
You can find out more on bear markets and how they affect your investments here.
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5 people have left comments
Bull Market–Short On Cashflow said on August 11, 2009, 1:18 pm:
[...] a response, or trackback from your own site. « The US economy is One Big Ponzi Scheme Bear Market [...]
This Rally Is Devastating my Brokerage Account–Short On Cashflow said on August 11, 2009, 1:24 pm:
[...] the recession while hinting that the “recovery” will also be difficult. Even dedicated bears like Martin Weiss, founder of the fiercly independent stock research company Weiss Research, has [...]
Investing in property without buying and managing property–Short On Cashflow said on August 15, 2009, 7:29 am:
[...] at stocks. I am not a stock investor. I was just looking to educate myself as markets continue in a bear market. (‘Bear’ market means the market continually goes down while ‘bull’ market means the market [...]
Where is the Market Headed?–Short On Cashflow said on August 15, 2009, 3:08 pm:
[...] to Mike Maloney we are currently in a bear market rally. The DOW dropped from around 14000 to around 7000 and has partly recovered to more or less [...]
My YTD stock returns, all pain, no gain–Short On Cashflow said on August 15, 2009, 3:10 pm:
[...] Even worse, recently, I bought a large amount of SH, an inverse Exchange-Traded Fund (ETF) that rises when the S&P declines because I believe that the U.S. stock market is in the midst of a long-term bear market. [...]
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