Bear Market

A bear market is defined as a period in which the prices of Securities fall by 20% or more from their recent highs, typically over a span of at least two months. This term is most commonly used to refer to declines in Stock markets, but it can also apply to other Asset-classes/">Asset Classes such as Bonds, currencies, and Commodities. Bear markets are often characterized by widespread pessimism and negative investor sentiment, leading to a self-sustaining downward spiral in Asset prices.

Examples of bear markets include:

• The 2007-2009 bear market, triggered by the subprime mortgage crisis, saw the S&P 500 Index fall by approximately 57% from its peak.

• The dot-com bubble burst in 2000 led to a bear market that lasted until 2002, during which the Nasdaq Composite lost about 78% of its value.

Bear markets can also occur in more localized markets or sectors. For instance, a bear market in oil prices was seen from mid-2014 to early 2016, where crude oil prices dropped from over $100 per barrel to around $30.