Bear Market: What Does It Mean?

A bear market is a period when stock prices fall 20% or more from recent highs and stay down, usually alongside widespread investor pessimism. Bear markets can last a few months or stretch past a year, and they often (but not always) overlap with an economic slowdown or recession. The opposite is a bull market, when prices rise steadily. Short rebounds, sometimes called bear market rallies, can happen before prices settle lower again. For long-term investors, bear markets are a normal part of the market cycle, and staying the course with a diversified portfolio usually works better than trying to time the bottom.