What is a Bear Market?
A bear market refers to a widespread decline in asset prices of at least 20% from recent highs. During a bear market, the stock market declines, and assets become less valuable. This is different from market corrections, when prices fall at least 10%—these are usually temporary. The nature of a bear market is longer. In bear markets, stocks (particularly small cap stocks or those with small market capitalizations) can experience increased volatility or drastic price changes due to lower trading volume.
Bear markets are just 25 months (around 2 years) long in average, compared to an average length of 59 months (nearly 5 years) for bull markets
Characteristics of a bear market:
Declining economy
low business profitability
Negative Investor Sentiment
Declining Stock Values
Strategies to survive a bear market:
Dollar Cost Average
Diversify your portfolio
Utilize put options
Search for yield
