Equity · Core
Bear Market
A bear market is a sustained decline in a broad index — the folk threshold is −20% from a peak, which is a headline, not a model.
Definition
−20% from a high is the journalist definition. A growth scare, a credit event, and a valuation reset can all print −20% and then do very different second years. Duration of the drawdown matters more than the tag.
Why it matters
Risk limits, vol targets, and political narratives flip on the word. Forced selling does not wait for −20.
Case
2018 printed almost −20% and reversed. 2022 printed −25% with rates, not recession, as the first driver. The label fit both; the hedge did not.
How to read it
Name the driver (rates, credit, earnings, geopolitics). A bear from tight money is not a bear from a default cycle.
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