Difference Between Bear Market and Correction

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1. How to Invest when Price Falls?

Sometimes, prices of things you invest in go down. This is okay and happens to everyone who invests. You don't need to worry. Once you understand the two types of price drops, it'll be easier to handle when your investments are worth less.

To do well when prices fall a lot, like in a big drop, it's best to think about the long term and stay disciplined. If you're really good at trading, there are ways to make money even when prices are going down a lot. These ways include things like selling short and buying special contracts.

When the economy is doing well and prices are mostly going up, sometimes they'll go down a little for a short time. This is called a "pullback" or "temporary correction." Just like stocks, the prices of digital money (cryptocurrencies) don't always go up or down in a straight line. They might go up for a bit, then stay the same, or go down a bit, and then go up again.

Out of the two, big drops called "bear markets" are riskier for your investments. It's important to learn how to tell if a bear market is coming. First, figure out how the economy is doing. That way, you'll know what to do when prices start to fall.

If you're not sure if it's a bear market, the smart thing to do is spread out your investments and keep following your plan. Spreading out your investments means you don't put all your money in one thing, so you don't lose a lot if the prices go down a lot. If you stick to your plan, you'll know when to buy and sell no matter what's happening in the market.

2. Correction vs Bear Market

Here's a simple table to show how the two are different:

	Correction	Bear Market
Drop	At least 10% (approx.)	At least 20% (approx.)
Market condition	Economy doing well	Economy not doing well
Frequency	Occurs every hour, day, week, or month	One time in 3 to 4 years
Duration	No fixed time	Take 10 months to 12 months

Even though big drops and really big drops can be disappointing, they're normal in a good economy. If you know how to tell them apart, you can handle these times better. After a big drop, prices usually get better in a few months. But really big drops have a bigger effect on the markets because they last longer and prices fall a lot. So, it might take a few months or even a few years for things to get better after a really big drop.