In 2008 and early 2009, share values declined sharply as the global economy fell into a severe recession and that type of stock market is referred to as a bear market.
When investors are less risk-seeking and more risk-averse, this is referred to be a bear market. During this kind of bear market, which can last for months or years, investors steer clear of gambling and choose instead safe, boring assets.
A bear market can be caused by a variety of factors, but in general, a weak, stopping, or sluggish economy, bursting stock marketplace booms, epidemics, invasions, geopolitics crises, and big economic changes in society, like the transition to an internet economy, are just a few of their causes.
Typical indicators of a weak or deteriorating economy include:
- Low employment
- Low discretionary income
- Weak productivity
- Reduction in corporate earnings
Learn more about a bull, bear, and volatile stock markets here:
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