Definition
A bear market is a period where stock prices fall steadily — at least 20% from the top. Investors are pessimistic, news is negative and it is difficult to make money on regular stock buying. Think of the bear swiping its claws downward.
Historical examples: Financial crisis 2008-2009 — S&P 500 fell 57% · Covid crash 2020 — fell 34% in 33 days · Dot-com 2000-2002 — Nasdaq fell 78%
Opportunity: Bear markets are painful — but historically the best time to buy stocks cheaply. Those who bought in March 2009 made fortunes.
"The storm always clears the way for clearer air. The courage to act in darkness separates the great investors from the rest."— Florence Scovel Shinn