What is a bear market?

A bear market technically occurs when market prices drop 20% or more from recent highs. Because they are pessimistic concerning the direction of the market, bears use various techniques that, unlike traditional investing strategies, profit when the market falls and lose money when it rises.

What is a bear investor?

A bear is an investor who is pessimistic about the markets and expects prices to decline in the near- to medium-term. A bearish investor may take short positions in the market to profit off of declining prices. Often, bears are contrarian investors, and over the long-run bullish investors tend to prevail.

Why do investors buy more shares in a bear market?

It gives the investors’ confidence that the share prices will rise and they tend to buy more shares in the market. The investors who are optimistic and buy shares at this time are called “Bulls.” A bear market is when the buyers are pessimistic about the rise in the prices of the shares and the sellers outnumber the buyers in the market.

Are You fearful of bear markets?

Since 1709, the financial world has embraced bears as the mascot for periods when stocks fall on hard times. 1 But just because many investors are fearful of bear markets doesn't mean you need to be. Here's a breakdown of what you should know about bear markets, including tips for your dollars when facing one. Feed your brain. Fund your future.