A bear market is, very simply put, any single stock or index that experiences a severe decline in value over a sustained period of time. The technical benchmark is this: if a stock or index falls more than 20% from recent highs, then this stock or index is considered to be in a bear market.
Other common reasons could be international conflicts, geopolitical crises, industrialisation, and many more.The duration of bear markets can vary in length depending on global situations such as the pandemic and the various government policies being put into place. No two bear markets are the same, so it can be difficult to estimate exactly how long this one would last.
On an individual level, the biggest hit would probably be that downward sloping line indicating your stock portfolio performance. This can be quite steep in some cases and may cause you some alarm. Some questions to ask yourself before investing in a bear market would be the following. Is this good or service essential in some way? Is this a good business with steady operations and a solid track record? Will this company and its products still be relevant in decades to come?
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