A Bear Market is a period of generally falling prices of a particular type of investment. There can be a Bear Market in the stock market, gold, bonds, wheat and etc.
Bear Market does not indicate a period of steady price declines that are uninterrupted by gains. Most Bear Markets are not straight down. "Two steps down and one step up" describes the typical Bear Market.
Bear Markets can last for months, years or decades.
Bear Markets are easy to identify after the fact. Of course, knowing that the Japanese stock market (Nikkei 225) was in a Super Bear Market from 1990 through 2003 is of little value to the investor. To have known before 1990 would have been of great value. An investor with such knowledge would have sold Japanese equities. An investment professional may have engaged in short selling in that market.
The problem is in the word "know". One doesn't know for sure until the Bear Market is over. If we can't know, then what is the next best thing? Well, some type of forecast or prediction. That is what an investor is looking for when asking "Are we in a Bear Market?". The investor wants to know if the market will generally fall from the present point in time. An investor with a Bearish outlook will sell. An investor with a Bullish outlook will buy.
Investors may also ask a different but related question... How will I know that a Bull Market is over? In other words... How will I identify the beginning of a Bear Market. Bear Markets begin when Bull Markets end. Bull Markets produce price gains and much confidence. At the precise time when a powerful Bull Market ends and a Bear Market begins, there is a lot of peace and prosperity. This presents an emotional issue. The best time to get out of the market is often marked by prosperity and greed. It is easy to sell when news is bad. But can you sell when rising prices, good news and optimism characterize the investment environment? The investor needs a signal to predict the end of the Bull Market and the beginning of a Bear Market... A signal that can bypass the prevailing optimism and present an objective, fact based forecast. He is looking to sell high and buy low. That may require action to be taken contrary to natural and prevailing emotions.