◈ GLOSSARY · INVESTING
Bear Market.
A definition, in plain English — with the books that teach it.
Reviewed by ClearValue Editorial Team · Jun 27, 2026
◈ DEFINITION
What it means
Definition
A drop of 20% or more from a recent high, sustained over weeks or months. Bear markets are shorter on average than bull markets but psychologically brutal — the headlines, the account statements, and your own brain all push toward selling at the worst possible moment. Most long-run wealth destruction in retail accounts traces back to selling in a bear market, not to the drawdown itself.
◈ IN PRACTICE
Example
The S&P 500 fell roughly 34% in 33 days from February to March 2020. By August it had recovered to a new all-time high. Investors who sold in late March locked in the loss; investors who kept buying through their 401(k) bought the cheapest shares of the cycle.
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