Bear Market

What is Bear Market? — Definition

A bear market is officially defined as a decline of 20% or more from a recent high, sustained over at least two months. It's the opposite of a bull market and usually reflects a broader economic deterioration — rising unemployment, falling corporate earnings, or tightening credit conditions.

Historically, bear markets last an average of about 9–16 months and result in average losses of around 35–40%. The worst bear market in modern history was the 2007–2009 financial crisis, when the S&P 500 fell approximately 57%. Bear markets are painful but historically temporary — every single bear market has eventually been followed by a new bull market.

Example

The COVID-19 crash of 2020 was technically a bear market — the S&P 500 fell 34% in just 33 days — but it was one of the shortest on record, recovering fully within 6 months.

The BMInsider Fear & Greed Index tends to flash 'Extreme Fear' readings during bear markets, which historically have marked some of the best long-term buying opportunities.