<P> A bear market is a general decline in the stock market over a period of time . It is a transition from high investor optimism to widespread investor fear and pessimism . According to The Vanguard Group, "While there's no agreed - upon definition of a bear market, one generally accepted measure is a price decline of 20% or more over at least a two - month period ." </P> <P> An analysis of Morningstar, Inc. stock market data from 1926 to 2014 found that a typical bear market "lasted 1.3 years with an average cumulative loss of − 41%", while annualized declines for bear markets range from − 19.7% to − 47% . </P> <Dl> <Dd> A bear market followed the Wall Street Crash of 1929 and erased 89% (from 386 to 40) of the Dow Jones Industrial Average's market capitalization by July 1932, marking the start of the Great Depression . After regaining nearly 50% of its losses, a longer bear market from 1937 to 1942 occurred in which the market was again cut in half . Another long - term bear market occurred from about 1973 to 1982, encompassing the 1970s energy crisis and the high unemployment of the early 1980s . Yet another bear market occurred between March 2000 and October 2002 . Recent examples occurred between October 2007 and March 2009, as a result of the financial crisis of 2007--2008 . See also 2015 Chinese stock market crash . </Dd> </Dl> <Dd> A bear market followed the Wall Street Crash of 1929 and erased 89% (from 386 to 40) of the Dow Jones Industrial Average's market capitalization by July 1932, marking the start of the Great Depression . After regaining nearly 50% of its losses, a longer bear market from 1937 to 1942 occurred in which the market was again cut in half . Another long - term bear market occurred from about 1973 to 1982, encompassing the 1970s energy crisis and the high unemployment of the early 1980s . Yet another bear market occurred between March 2000 and October 2002 . Recent examples occurred between October 2007 and March 2009, as a result of the financial crisis of 2007--2008 . See also 2015 Chinese stock market crash . </Dd>

The secular trend has been used to explain the fact that