A ‘bear market’ looms. What exactly does that mean?

The S&P 500 fell into a bear market on Friday. What does that mean?

Bear market is a term used by investors to describe a steep and sustained market downturn. It is a drop of 20% or more from recent highs.

The phrase can be applied to a broad stock index like the S&P 500, but also to individual stocks.

It's a good time for young investors to put money in the market because interest rates are climbing.

The stock index is in a bear market. High inflation, rising interest rates, and the fear of recession are some of the factors that Wall Street is afraid of.

There isn't anything special about the 20% line. It is a psychological hurdle for investors.

Charlie Fitzgerald III is a certified financial planner and he said that it is a shortcut in language around the financial markets that people use.

The bull market has largely been the case since the Great Recession.

The stock market has bear markets. According to Guggenheim Investments, there have been nine declines of 20% to 40% in the S&P 500 since World War II. The analysis does not include 2022.

After those declines, stocks took an average of 14 months and 58 months to recover. The last bear market was in February and March of 2020. The stock market rebounded by mid-August.

Fitzgerald said it was impossible to say how long the current downturn would last.