Bear Market

A bear market is a sustained decline of 20% or more from a recent peak in a major index. The 20% threshold is rule-of-thumb rather than mathematical — what matters is the prolonged downtrend in price, sentiment, and forward-looking economic indicators.

Bear markets typically follow tightening monetary policy, recessions, or the deflation of asset-price bubbles. The average duration in US equities since 1928 is roughly nine months; the longest (2000–02 dotcom unwind) lasted 31 months.

A correction (10–20% pullback) is shorter and shallower; a crash is a sharp drop within days, usually inside an existing trend rather than a regime change.