A bear market is a financial market characterized by falling prices and pessimism among investors.
It is typically caused by a weak economy, geopolitical uncertainty, or a decline in corporate profits. During a bear market, there is usually a widespread sense of panic and a rush to sell assets, which further depresses prices. This can result in a vicious cycle of selling and declining prices, which can last for several months or even years.
In a bear market, investors often seek refuge in safe-haven assets such as gold, bonds, and cash, rather than riskier investments like stocks. Bear markets can have significant negative impacts on the economy, including job losses, reduced consumer spending, and decreased investment. However, bear markets can also present buying opportunities for savvy investors who are willing to take a long-term view.