Bærbreddebølge

Bærbreddebølge, also known as a "bear market," is a term used in finance to describe a prolonged period of declining stock prices and investor pessimism. The term originates from the behavior of bears, which typically avoid the market during such times. A bear market is characterized by a significant drop in stock prices, often accompanied by a decrease in economic activity and consumer spending. This can lead to a cycle of negative feedback, where falling stock prices discourage further investment, leading to more selling and further price declines.

The exact definition of a bear market can vary, but it is commonly accepted that a bear market occurs when stock prices decline by 20% or more from a previous peak. This threshold is used to distinguish a bear market from a normal market correction or a bearish trend. Bear markets can last for several months or even years, and they are often followed by a bull market, where stock prices rise significantly.

Bear markets can be caused by a variety of factors, including economic downturns, geopolitical instability, changes in monetary policy, and market speculation. They can also be influenced by investor sentiment, as fears and pessimism can lead to a self-reinforcing cycle of selling and further price declines.

Despite the negative connotations, bear markets can also present opportunities for investors. Historically, bear markets have often been followed by significant rallies in stock prices, known as bull markets. Additionally, certain sectors and industries may perform better than others during a bear market, providing opportunities for investors to diversify their portfolios and take advantage of undervalued assets. However, it is important for investors to carefully consider their risk tolerance and investment goals before entering a bear market.