Why should you invest in bear market

Bear market rally

One important distinction is the difference between a bull market and a bear market rally. A bull market is a sustained uptrend in stocks — and one that typically results in new all-time highs being reached.

On the other hand, a bear market rally refers to a rise in stock prices after the plunge into a bear market, but one that is just a temporary rise before new lows. To envision this concept, consider how the 2007-2009 bear market unfolded. After reaching new highs in 2007, the stock market collapsed in 2008 after the subprime lending crisis resulted in several major bank failures. After bailouts were announced in late 2008, the market started to rise, but it ultimately reversed course and reached fresh bear market lows in March 2009.

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