Bearmarkt

Bear market, in financial markets, refers to a condition in which prices fall across a broad market index and investor sentiment turns negative. There is no formal threshold mandated by regulators, but a common rule of thumb is a drop of 20% or more from a recent peak, achieved over a span of weeks or months. This contrasts with a bull market, where prices rise and optimism predominates. In German-language contexts the term is Bärenmarkt; some texts also transliterate it as Bearmarkt.

Bear markets tend to be associated with economic slowdowns, decreased corporate earnings expectations, and tighter financial conditions. They can be triggered by recessions, rising interest rates, or shocks such as geopolitical events. Duration varies; some last a few months, others longer than a year, and they may include bear-market rallies where prices temporarily rebound.

Terminology: The origin of the term is uncertain. It is often linked to the imagery of bears that swipe downward, or to historical practices relating to selling bear skins before purchase. Regardless of origin, the term has long been used to describe downward market trends.

During bear markets, investors may shift to defensive assets, such as cash, bonds, or dividend-paying stocks, and focus on capital preservation. Analysts differentiate between cyclical bear markets that accompany economic downturns and secular bear markets reflecting longer-term structural changes. See also bull market and market cycles.