Certain financial terms are used in a variety of circumstances, but they become most identified with the stock markets. For example, real estate investors will often talk about a "bear market" when the price of real estate continues to drop for an extended period of time. However, to most people, a bear market is the term used to describe a stock market in decline.
The Decline Of A Bear Market
According to InvestingAnswers.com, a bear market occurs when at least 80 percent of the securities on a market such as the New York Stock Exchange consistently drop in value by an average of 15 percent or more. When economists predict a bear market on the horizon, that usually indicates an unstable and declining economy is on the way.
Bear Markets Are Commonly Associated With The "R-Word"
The Northrup Grumman benefits experts indicate that a bear market is usually an indication that a recession is on the way. In some cases, the bear market could bring in the recession, or the bear market could be the result of a recession started by other sources. For example, the real estate collapse of 2008 led directly to a bear market in the NASDAQ and New York Stock Exchange that lasted for between 12 to 24 months.
Get more out of your personal finances when you sign up for the financial services offered at Mint.com.