Bear Market

A bear market is a decline of 20% or more from a recent high, typically accompanied by pessimism about earnings or the economy and often (but not always) a recession. It is the mirror image of a bull market and the phase most buy-and-hold plans are actually tested against.

Bear markets are shorter than bull markets on average but feel longer, because losses register more sharply than gains of the same size (see loss aversion). Historically, US bear markets have lasted roughly one to two years peak to trough, with the recovery back to the old high sometimes taking considerably longer than the decline itself.