Charts & technicals
Bear market
Also called Bull market or Correction
A fall of 20% or more from a peak; a correction is 10%, and a bull market is a sustained rise.
How it works
The thresholds are conventions rather than anything meaningful, but they are used consistently enough to be useful shorthand.
Corrections of 10% have historically occurred about once a year on average, and 20% declines every few years. Both are ordinary features of investing rather than emergencies.
Where it misleads people
The labels are applied after the fact and say nothing about what happens next. A market is only known to have bottomed once it has already recovered substantially.
Related terms
- DrawdownThe fall from a portfolio’s previous peak to its lowest point before it recovers.
- RecessionA significant, broad-based decline in economic activity lasting more than a few months.
- VolatilityHow much an investment’s returns bounce around their average — the standard measure of risk.
- Market timingTrying to buy before rises and sell before falls, rather than staying invested throughout.
More in Charts & technicals
- Bollinger bands
- Trend
- Candlestick chart
- Technical analysis
- Golden cross and death cross
- Support and resistance
- MACD
- Relative strength index
All 13 Charts & technicals terms · The full glossary, 433 terms
Educational reference only. Nothing here is investment advice or a recommendation to buy or sell anything, and tax treatment depends on your own circumstances and the country you are in.