U.S. Stocks: All Bear Markets Begin As Corrections

The bear market in global stocks continues. In fact I believe we are in a bear market in the United States even though nobody wants to admit that its a bear market because technically the major averages are not quite down 20 percent even though some of the averages are, the Russell 2000 Index is down 25 percent from its high, in a bear market. There are many individual sectors that are way down in bear market territory.

All bear markets begin as corrections. You cannot be down 20 percent if you are not down 10 percent first. The bear market of 2001 when the S&P 500 Index and the Dow Jones Industrials were basically cut in half, the Nasdaq went down by 80 percent, that decline started as a correction. The same thing in 2008, that market meltdown where the S&P 500 Index and the Dow Jones Industrials were down about 50 percent, they were calling it a correction too until they realized that it was a bear market. And that is what they are talking about today.

Peter Schiff is an American businessman, investment broker and financial commentator. Schiff is the CEO and chief global strategist of Euro Pacific Capital Inc.