What’s Your Strategy for Surviving the Next Bear Market?

What’s Your Strategy for Surviving the Next Bear Market?

October 25, 2022

Let me set the scene. You come home after a long day at work or maybe even a much-needed vacation. In going through your mail or email you see your most recent statement from your retirement account or other investments. You open it up to look and there it is…. you see a big loss. Your breathing changes and your heartrate explodes. Your first thought may be, “I can’t afford to lose any more!  I need to fix this….What am I going to do?” If this sounds like it may be something you have lived through over the years or even just recently, we understand. The stock market can sometimes feel like a roller coaster and when it goes down, we can get emotional…quick. And while this may just be a normal reaction to seeing your accounts down 10-20%, it is important not to react to those feelings but rather stick with your planning and stay the course

So, if we are best not to react and make changes or sell when the market is down, what can we all do to stick with our investment plan and be rewarded long term? Here is where it is important to have what I call a Bear Market survival guide. A bear market is one in which the broad stock market, for instance the S&P 500 index, falls 20% or more from its peak. Historically, these events occur about every 3.5 years and average about 9 months in duration. Thus, throughout your investing lifetime, you may experience perhaps 10-15 of these. With odds like that, let’s now discuss what you can do to survive the next one.

  • Breath- it sounds simple, but in that moment, a few deep, cleansing breaths can absolutely do wonders to lower your heart rate and accompanied stress
  • Eat right and get some sleep- Again, simple advice and perhaps not what you thought a financial advisor may say, but by eating a healthy diet and getting much needed rest, it is a fact…we think more clearly, and our stress is lower.
  • Dig into a distraction- Here it is important to keep living your life. Attend a child or grandchild’s soccer game, go to dinner with friends, talk a walk or even binge the new Netflix series your friends are talking about. These distractions will not only make you happier, but they will also distract you from what your investments are doing
  • Lean into perspective- After calming down and lowering your stress, this last tip may be the most valuable. Say it with me, market volatility, corrections and even bear markets do happen and its okay. It is a temporary loss we must endure to achieve and sustain the long-term positive returns we all desire. Remember, the greater risk is not in being in the next 20% market decline, it is being out of the next 100% advance.

So, how will you survive the next market down-turn? There is no doubt bear markets can be un-nerving. But, while they can be painful, it is important to remember markets are positive a majority of the time. With some of the knowledge above and simple tactics noted today, hopefully you now better equipped to survive the next one that comes along. You and your financial plan will be better off for it. As always, if myself or a member of our team may be of any help in starting or continuing this conversation, please be sure to let us know.

Until next time, here’s to the pursuit of living a better life! 


The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation.  Any opinions are those of Luke Kuchenberg and not necessarily those of Raymond James. 

 The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market.