Mar 07 2011

What is a bear market?

Category: Finance


Bear MarketA bear market is considered a market condition where the prices of the majority of securities in multiple indices are falling. The rate of descent is typically 20% or more, from the previous high, in the DJIA, S&P 500, or NASDAQ for a period of at least 2 months. These falling prices can be attributed to a number of factors but most values will continue trending lower and lower until they rally or hit the market bottom, which can take months or sometimes years. A market correction, on the other hand, is a bit different. A market correction is characterized as a more dramatic short term downward trend with a duration of less than 2 months. Market corrections can occur for a number of reasons including profit taking, expectation of news, and actual news.

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