A bear market is a prolonged period of falling prices for a commodity or security. (See Bear Market Definition.)  While a bull market is characterized by widespread optimism, the mood during bear markets is predominantly pessimistic. In fact, at the end of a bear market the majority of investors have a deep disdain for the market..

Market corrections are much shorter in duration and are not normally accompanied by severe pessimism.

Most investors fear a bear market, partly because until recently there were very few options for the average investor to be safe, other than staying in cash. Now, there are several vehicles for investors to hedge against or profit from a declining market.

Bear Market Mutual Funds are bought and sold the same way “traditional” mutual funds are traded.  However, these funds are set up to increase in value when the market falls. For this reason, they are often called inverse funds or short funds.

Bear Market ETFs are traded on all major stock exchanges and are bought and sold the same way corporate stocks are, i.e. a trader can short them or buy options against them. Several ETFs are set up to increase in value when the underlying index falls.  ProShares offers a wide range of bear market ETFs.