Whenever we speak of a bear market, we tend to think that there is only 1 type of bear markets and all bear markets are the same. However, I can think of 2 different types of bear markets (shortened to “bear” hereinafter); the first one is similar to the market downturn that we experienced recently which is fast and sharp. Let’s call it the ferocious bear. Examples of the ferocious bear would be the Asian Financial Crisis in 1997/1998 and the Global Financial Crisis in 2008/2009. The second type of bears is gradual but long-winded. Let’s call it the long-winded bear. An example of the long-winded bear would be the one that lasted from 2000 till 2003. The figure below shows both types of bears as happened to the Straits Times Index (STI). You should be able to recognise the bears easily.

Bears on STI

What are the characteristics of …