A bear market is a phase of several months or years during which securities prices consistently fall. Bear market is the term typically used in reference to the stock market. But it can also describe specific sectors such as foreign exchange, bond or real estate. In the bear market environment, selling increases and short selling is frequent. During bear market phase, Investing can be risky even for the most seasoned of investors. It is a period marked with falling stock prices.
Many investors opt to sell off their stocks during a bear market for fear of further losses, thus fueling a vicious cycle of negativity.
A bear market occurs when there are more sellers than buyers. In a bear market, for example, the sellers are the supply, while the buyers are the demand. Therefore, when the market is bearish, seller numbers are high and buyer numbers are comparatively low.
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Some of the major situations that causes a bear market are: