Definition

A market condition where prices are falling, typically by 20% or more, signaling widespread pessimism.

What to consider

  • Understand that declining prices are a natural part of market cycles.
  • Stick with a long-term strategy to weather short-term drops.
  • Review your portfolio to ensure it aligns with your risk tolerance.

Real world scenarios

  • When the stock prices started falling by over 20%, Sophia described the period as a bear market, urging her to stay calm and think long term.

Related terms

Investments & Retirement