What is a Bear Market?
A Bear Market is a financial market condition where asset prices experience a prolonged decline. It is typically characterized by a drop of 20% or more from recent highs.
Signs of a Bear Market:
🔵 Long-term decline in asset prices (stocks, cryptocurrencies, etc.).
🔵 Investor pessimism and mass sell-offs.
🔵 Decrease in economic activity and GDP growth.
🔵 High volatility and sharp price crashes.
Causes of a Bear Market:
🔵 Economic crisis or recession.
🔵 Interest rate hikes by central banks.
🔵 Financial scandals or collapses of major companies.
🔵 Geopolitical instability.
How do investors act in a Bear Market?
🔵 Cautious strategy – buying low-volatility assets (gold, bonds).
🔵 Short selling – profiting from falling prices (selling first and buying back cheaper).
🔵 Long-term investments – purchasing promising assets at low prices and waiting for growth.