Bear Market
A bear market is a common term for describing falling prices, or a downward trending market, sector or stock.
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Bear markets can be brief spells of falling prices, lasting as little as two months, or can span out over a decade or longer.
Although the exact definition of a bear market is difficult to pat down, a bear market is often pronounced when prices decline by 20 per cent or more over two months or longer.
During a bear market, there can be brief periods of rapidly rising prices (rallies), followed by a price retreat. Savvy investors often use these periods to make quick gains - prefering to buy and trade, rather than buy and hold for the long term.
Bear markets are not all bad. Some strategies such as short-selling can be used to make money when prices fall.
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