Bear Market

Unfortunately, not the place where the three bears got their porridge.

Sometimes there are conditions in the stock market where things aren't always looking up. Companies aren't making as much money, prices are falling and investors begin to get worried about their securities. A bear market is one in which it feels like the economy is spinning out of control and the sky is falling. The beginning of a bear market is when share prices show a decline of 20% or more that lasts for two months or more.

We all remember learning about the Wall Street Crash in 1929; that was a bear market. As bearish as it gets. A bear market can affect Joe and Jill Shmo, not just the big wigs in Wall Street.

Oh, and by the way...while a bear market is a prolonged period of falling stock prices accompanied by general investor pessimism, if it's a short period of declines followed by price increases, it's called a correction. What's "prolonged"? It's in the eye of the beholder. Or, to be more specific, it's how the talking heads on CNBC define it.