What is a Bear Market?

Answer:
A bear market is the term used by investors

to describe a lengthy time period in which investment prices decrease. Usually bear markets occur during times when unemployment is high or inflation is increasing.

Unemployment and inflation are just two of the many economic indicators that may affect the stock market. Investors often review economic indicators such as:
GDP (Gross Domestic Product) - measures the condition of the economy
CPI (Consumer Price Index) – a widely used measure of inflation
PPI (Producer Price Index) – used in conjunction with CPI to measure inflation

A bear market may provide investors the opportunity to purchase stocks at a lower cost; however, investors are also affected if the stocks they hold in their portfolio have decreased in value as well. The most famous bear market was during the Great Depression in the 1930s. The opposite of a bear market is a bull market . In a bull market, there is a lengthy time in which stock market/investment prices increase.


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