A bear market is a sustained period of price declines. The technical definition of a bear market is when a broad market index falls by 20% or more from its most recent all-time high.
Bear markets are typically associated with economic downturns, rising unemployment, restrictive monetary policy (like rising interest rates), or severe external shocks.
Psychologically, bear markets are incredibly difficult for investors to endure. Volatility spikes aggressively, and asset correlations tend to converge toward 1.0, providing few safe havens. However, they also create the lowest valuation entry points for long-term capital accumulators.