Bear market = stock market decline of 20%+ from recent high. Fear, panic selling, "cash is king" mentality dominate.
📊 Characteristics
- Broad market index down > 20%
- New 52-week lows frequent
- Volume on down days > up days
- Media negative, retail capitulation
- VIX high (> 30)
- Liquidity crisis (sometimes)
🎯 Famous Bear Markets
- 1929-32: -89% (Great Depression)
- 2000-02: -49% (Dot-com)
- 2007-09: -57% (GFC)
- 2020: -34% (COVID — fastest ever)
- 2022: -25% (Fed rate hikes)
📉 Survival Strategy
- Cash 30-50% of portfolio
- Only buy quality (blue chips, dividend stocks)
- Average down slowly with DCA
- AVOID leverage (margin call risk)
- Bottom usually after capitulation + recession news peak