The benchmark S&P 500 index began the week with significant losses, putting it at a so-called bear market level.

As concerns about inflation which is at its highest level in decades and increasing interest rates overwhelm investors, Wall Street is once again in the grips of a bear market. The Federal Reserve has indicated that it will hike interest rates quickly to try to control inflation and this is what they did today by .75%.

 Investors have been forced to re-evaluate what they're ready to pay for a wide range of stocks, from high-flying tech companies to traditional automakers, due to the conflict in Ukraine and a downturn in China's economy. Big swings have been the norm, and this week was no exception. Even though the most recent bear market occurred just two years ago, this would be a first for those investors who began investing on their phones during the pandemic. Stocks have seemed to go in only one direction for years, thanks in large part to exceptional Federal Reserve operations. Following stinging losses and catastrophic plunges in risky assets such as cryptocurrency, the rallying cry of "buy the dip" has faded. Today, Bitcoin dipped below $22,000. Late last year, the price of Bitcoin was approaching $68,000.

Click Here to learn how to invest & make huge profits in Crypto

Here are some often asked questions about bear markets.

WHAT IS A BEAR MARKET AND WHY IS IT CALLED THAT?

A bear market is a term used by Wall Street to describe when an index, such as the S&P 500, the Dow Jones Industrial Average, or even a single stock, has plummeted 20% or more from a recent high over a period of time. Why is a bear being used to signify a market downturn? Bears hibernate, thus bears signify a market in decline.

The S&P 500, Wall Street's major health indicator, fell 3.9 percent. It's down 21.8 percent from its early-year high and is now in a bear market. The most recent bear market lasted from February 19, 2020 to March 23, 2020. In that one-month span, the S&P index plummeted 34%, making it the shortest bear market in history.

It fell 3.9 percent; it's down 21.8 percent from its early-year high and is now in a bear market.

WHAT's Frustrating INVESTORS?

The number one market foe is interest rates, which are rapidly rising as a result of the economy's strong inflation. Low interest rates operate as steroid-like stimulants for stocks and other investments, and Wall Street is now experiencing withdrawal symptoms.

The Federal Reserve has made an aggressive pivot away from propping up financial markets and the economy with record-low rates and is focused on fighting inflation. The central bank has already raised its key short-term interest rate from its record low near zero, which had encouraged investors to move their money into riskier assets like stocks or cryptocurrencies to get better returns.

The Federal Reserve announced last month that additional rate hikes of double the typical level are inevitable in the coming months. Consumer prices have risen 8.6% in May compared to the same month a year ago, the highest level in four decades.

SO ALL WE NEED TO DO NOW IS AVOID A RECESSION?

Even if the Fed manages to keep inflation under control without precipitating a recession, increasing interest rates put downward pressure on stocks.

Customers can't buy as much items if they have to pay more to borrow money, so less revenue flows to a company's bottom line. Stocks have a tendency to follow profits over time. When interest rates rise, investors become less inclined to pay higher prices for stocks, which are riskier than bonds, because bonds are suddenly paying more in interest owing to the Fed.

When a bear market coincides with a recession, stocks drop nearly 35% on average, compared to a nearly 24% drop when the economy escapes a recession.

ARE YOU SAYING I SHOULD SELL EVERYTHING RIGHT NOW?

Yes, if you need the money right away or want to lock in your losses. Otherwise, many financial advisors recommend riding out the ups and downs, knowing that the fluctuations are the price of entry for the higher long-term gains that equities have offered.

While selling equities to halt the bleeding might cease the bleeding, it would also stop any prospective gains. Many of Wall Street's best days have happened during or shortly after the end of a bear market. This includes two days in the heart of the 2007-2009 bear market when the S&P 500 rose over 11%, as well as gains of more than 9% during and shortly after the roughly month-long 2020 bear market.

Investing in stocks should only be done if the funds will not be needed for several years. The S&P 500 has recovered from each of its previous bear markets to reach new all-time highs. The stock market's down decade following the dot-com bubble's implosion in 2000 was notoriously cruel, but stocks have often been able to recoup their highs within a few years.

BEAR MARKETS: HOW LONG DO THEY LAST AND HOW DEEP DO THEY GO?

Since World War II, bear markets have taken an average of 13 months to travel from peak to trough and 27 months to return to breakeven. During those bear markets, the S&P 500 index has plummeted by an average of 33%. The S&P 500 plunged 57 percent during the 2007-2009 bear market, the largest drop since 1945. The faster an index enters a bear market, the shallower the bear market tends to be. Stocks have historically taken 251 days (8.3 months) to enter a bear market. When the S&P 500 has dropped 20% at a faster rate, the index has averaged a loss of 28%.

The longest bear market, which concluded in March 1942, lasted 61 months. It resulted in a 60% reduction in the index.

 Click Here to learn how to invest & make huge profits in Crypto

WHEN A BEAR MARKET ENDS, HOW DO WE KNOW?

In general, investors seek a 20% gain from a low point, as well as consistent gains over a six-month period.