To be very clear, we are not in a bear market (at least, not as of our writing this on March 22, 2026).
By historical standards, a bear market occurs when stock market indices fall at least 20% from their highs. With the S&P 500 down nearly 5% year-to-date, and more than 6% from its peak, we are nowhere near “bear market territory”.
Will we get closer to one?
We might; but the truth is no one knows for sure; anyone who claims that s/he does is just guessing. Even if they guess right, it’s still guessing.
If you’ve ever been hiking and seen a real bear, you know that they often appear out of nowhere. And as terrifying as that might have been for you, you likely know that in the vast majority of instances, the bear really wants nothing to do with you. It probably just wants to go about its business. Often, your best bet is to just go about yours. Panicking, running, and screaming usually are the worst things that you could do. But there’s no tried-and-true, written-in-stone protocol for handling a bear attack, in part because attacks are so rare…
Similarly, bear markets can appear out of nowhere. A stock market that was cruising along for months has to contend with unforeseen events: wars, tariffs, pandemics…we could make a really long list here. You might be well-served by following some advice about how to respond to the presence of a real bear:
- Be bear-aware
- Risk is always around you; be sure you continually check in on the risk on your portfolio and your finances overall; be aware of what could derail you.
- Don’t panic
- Be careful about selling when your positions are down.
- Remember how important it is to keep cash on hand for those times when you need access to funds, and your investments are in a slump.
- Play dead
- The markets have historically rewarded the patient investor, and remember that you do not need the money that is invested today.
- Fight back
- Consider rebalancing your portfolio based on your risk tolerance to investments that may have more favorable values.
When the bear appears, it feels like it will never leave; eventually, it does. Remember that bear markets are temporary. Within the past 100 years, the US stock market has provided a positive rate of return approximately 75% of the time. And just like we never know when a bear market will arrive, we also never know when the best days to be invested will be. Missing out on just the 10 best days over a 20-year period can potentially cause your average rate of return to be cut nearly in half*.
Your portfolio should be designed to withstand a bear attack and prepare for a rebound…as long as you let it.
Not sure about whether your investments are positioned to absorb the shock of a bear market and participate in the potential rebound? Reach out to us and let us do a deep dive into the details of your investment holdings and asset allocation.
Past performance is not a guarantee of future results. All investments contain risk and may lose value.
*Morningstar and Precision Information, dba Financial Fitness Group 2024