The 5 best trading and investing strategies in a bear market

What is a bear market?

A bear market is a period when prices show a significant drop after seeing recent highs; this usually corresponds to a price drop of at least 20%. When this happens, investors can decide to withdraw their stake to prevent their winnings from being eroded or to reduce their losses. If investor sentiment becomes increasingly pessimistic, prices are likely to drop further, making investing in a bear market risky.

It can also lead to higher unemployment levels, lower consumer spending and deflation.

As in a bull market, the appearance of a bear market is influenced by supply and demand. In a bear market, supply is high and demand is low, unlike in a bull market.

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