A bear market describes a sustained period of falling prices in a financial market, typically defined as a decline of 20% or more from recent highs, accompanied by widespread investor pessimism and caution about the near-term future. Bear markets can be triggered by various factors, including economic slowdowns, high inflation, geopolitical events, or a broader loss of investor confidence.
While bear markets can feel unsettling, especially when checking portfolio values that have dropped, history shows that markets have historically recovered and gone on to reach new highs after every bear market so far. For long-term investors, particularly those investing via SIPs, a bear market can actually be beneficial, since regular monthly investments buy more units at lower prices during the downturn — a real-world application of rupee cost averaging.
It's also worth remembering that no one can reliably predict exactly when a bear market will start or end, which is precisely why a disciplined, regular investment approach tends to serve investors better than trying to time entries and exits around it.