Chime® is a financial technology company, not a bank. Banking services, credit, and debit card provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC.

What Is a Bear Market?

Chime Team • March 26, 2024

Bear Market

A bear market is a term used in finance to describe a market condition in which securities prices fall 20% or more from recent highs, usually over a continued period. This decline is often accompanied by widespread pessimism by investors. Bear markets can occur in any asset class and are the opposite of bull markets, which are characterized by rising prices.

Examples of bear markets include the dot-com bubble burst in the early 2000s and the global financial crisis of 2007-2008. During these periods, major stock indices, such as the S&P 500 and the NASDAQ, experienced major declines, erasing trillions of dollars in market value. These downturns were caused by many factors, including overvaluation of assets, economic recessions, and financial crises.

Bear markets impact investment portfolios, as well as the broader economy. Additionally, they can lead to reduced consumer and business spending, contributing to economic downturns. For individual investors, a bear market can significantly affect the value of their investments, especially if their portfolios are mostly made up of equities.

On a personal level, navigating a bear market requires a strategic approach to investing. This may include:

  • Diversifying investments to reduce risk exposure
  • Considering long-term investment horizons to ride out market volatility
  • Avoiding panic selling, which can lock in losses
  • Exploring opportunities to buy high-quality assets at lower prices

Bear markets are important to understand when taking a closer look at:

  • Economic Indicators: Bear markets can call attention to hidden economic issues that may need to be addressed by policymakers.
  • Market Cycles: Understanding that markets move in cycles can help investors maintain perspective during downturns and capitalize on eventual recoveries.

Bear markets are a natural part of the economic cycle, presenting challenges and opportunities for investors. Recognizing the signs of a bear market and understanding its meanings can help people protect their investments and even find value in tough market conditions. This can be done by maintaining a balanced perspective during bear markets, focusing on long-term financial goals, and recognizing that downturns, while challenging, are temporary phases in the market’s broader cycles.

Chime® is a financial technology company, not a bank. Banking services are provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC. The Chime Visa® Debit Card and the Chime Credit Builder Visa® Credit Card are issued by The Bancorp Bank, N.A. or Stride Bank pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit and credit cards are accepted. Please see the back of your Card for its issuing bank.

While Chime doesn’t issue personal checkbooks to write checks, Chime Checkbook gives you the freedom to send checks to anyone, anytime, from anywhere. See your issuing bank’s Deposit Account Agreement for full Chime Checkbook details.

By clicking on some of the links above, you will leave the Chime website and be directed to a third-party website. The privacy practices of those third parties may differ from those of Chime. We recommend you review the privacy statements of those third party websites, as Chime is not responsible for those third parties' privacy or security practices.

Third-party trademarks referenced for informational purposes only; no endorsements implied.

‡ SpotMe® for Credit Builder is an optional, no interest/no fee overdraft line of credit tied to the Secured Deposit Account. SpotMe on Debit is an optional, no fee service attached to your Chime Checking Account (individually or collectively, “SpotMe”). Eligibility for SpotMe requires $200 or more in qualifying direct deposits to your Chime Checking Account each month.

Opinions, advice, services, or other information or content expressed or contributed here by customers, users, or others, are those of the respective author(s) or contributor(s) and do not necessarily state or reflect those of The Bancorp Bank, N.A. and Stride Bank, N.A. (“Banks”). Banks are not responsible for the accuracy of any content provided by author(s) or contributor(s).

Address: 101 California Street, Floor 5, San Francisco, CA 94111, United States.

No customer support available at HQ. Customer support details available on the website.

© 2013-2024 Chime Financial, Inc. All rights reserved.