What term describes a steady drop or stagnation in the stock market over a period of time?

The term that describes a steady drop or stagnation in the stock market over a period of time is a bear market. In a bear market, investor confidence is generally low, leading to a prolonged period where stock prices are declining. This decline is typically defined as a drop of 20% or more from recent highs and can last for months or even years. Bear markets often coincide with economic downturns or recessions, causing widespread pessimism among investors.

Understanding a bear market is crucial for investors because it impacts investment strategies and risk assessments. During such periods, investors might consider conservative investments or might choose to stay out of the market altogether while waiting for a recovery. This concept is fundamentally different from a bull market, where prices are rising, and optimism prevails. A market correction refers to a temporary decline of at least 10%, but it does not necessarily indicate a prolonged downturn like a bear market. A volatile market refers to frequent and significant price fluctuations, which can happen in both bull and bear markets.