When does a market correction become a bear market? Well according to InvestorWords.com the definition of a bear market is:
“A prolonged period in which investment prices fall, accompanied by widespread pessimism. If the period of falling stock prices is short and immediately follows a period of rising stock prices, it is instead called a correction. Bear markets usually occur when the economy is in a recession and unemployment is high, or when inflation is rising quickly.”
Another general guideline that is used to distinguish a correction from a bear is that a correction can be defined as a 10% decline, while a bear market is a 20% drop. So what do you think correction or bear?