Bear market definition

A market where prices have been steadily declining over time, and have fallen by 20% or more from a previous market peak.

What is a bear market?

A bear market means that prices have been steadily declining over time - and have fallen by 20% or more from a previous market peak. But, with a diversified portfolio, bear markets aren’t necessarily something to worry about.

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How long do bear markets last? 

There’s no hard-and-fast rule for how long a bear market will last. Put simply, markets decline when demand for stocks falls – which can happen for a number of reasons, including rising interest rates or rising unemployment. Typically, the market won’t recover until demand for stocks rises. 

So far, every bear market has fully recovered. The graph below shows some of the major stock market crashes and bear markets in the UK from 1984 to 2021 – along with the recovery.

 

 

Bear vs bull market 

The opposite of a bear market is a bull market, which is when the market is rising. They get their names from the way these two animals attack: a bear swipes down with its paws, while a bull swipes up with its horns. 

 

Learn more about bull markets

H2What is a bear market?
OverviewA bear market means that prices have been steadily declining over time - and have fallen by 20% or more from a previous market peak. But, with a diversified portfolio, bear markets aren’t necessarily something to worry about.

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Investing glossary

It's important you know

All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest.

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