Glossary
Bear Market
A sustained decline of 20% or more from a recent peak.
The 20% rule of thumb is widely used but somewhat arbitrary — what matters is the prolonged downtrend in market sentiment, valuations, and economic forward-looking indicators.
Bear markets often follow tightening monetary policy, recessions, or asset-price bubbles deflating. Average duration in US equities since 1928 is ~ 9 months; the longest (2000-02 dotcom) lasted 31 months.
A correction (10–20% pullback) is shorter and shallower; a crash is a sharp drop within days, often within an existing trend.