Introduction to Personal Investing

The Basics

Why do bear markets happen?

Bear markets happen for many reasons. According to many experts, bear markets occur because investors are pessimistic about where the economy is headed, causing the declines to sustain themselves over a long period of time. Investors sell their shares, anticipating losses, and other investors see more losses in their portfolios, so they sell also. During bear markets, capital may be sidelined, or may be directed toward other investments such as bonds or cash in expectation of a signal to return to the equity markets.


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