Created: June 25, 2020
Modified: September 9, 2022

Episode 5: What To Do In A Bear Market?

Thank you for joining me for Episode 5 of my NEW Money Wisdom Question Series, where I film answers to common financial and retirement investment questions in 2 minutes or less. Today I want to talk about what to do in a bear market.

What is a Bear Market?

Let’s first talk about what a bear market is. A bear market is simply when the stock market drops from a high, down more than 20%. Now starting in February 2020, of course we had a drop of around 30%, depending on which index you’re measuring. So, we are definitely in a bear market. It has not recovered yet. It’s come back a little bit, but it still looks pretty ugly.

What to Do in A Bear Market:

So, what should you do? Well, there’s a couple of things. First of all, try to resist the instinct to react. You should have some kind of long-term financial plan that acts as your foundation. So, you’re not reacting to short-term market swings. Most of us are not short-term traders. I would discourage you from being a short-term trader. Most short-term traders do not do well. If you try to do that, you could blow up your future retirement savings.

What NOT to Do in A Bear Market:

  1. Do NOT act on emotion
  2. Don’t ignore a financial plan if you have one – that should be the foundation of your emotions
  3. You probably don’t want to sell something and buy something that seems like it did the best in the last year or three years.

Many times, what’s done the best is the most expensive. What’s done the worst, which people don’t want to buy many times, is going to recover. So, you can all think of stocks and industries right now that are just really hurting. Maybe they’ve overshot. Maybe they’ve gone too far. Maybe that’s what you should be buying. Most people wouldn’t buy those stocks. They would buy the ones that are doing the best.

In Conclusion…

You can see how complicated this gets. The bottom line is be really cautious about investing or selling in a bear market. You probably want to get some outside advice.

Thanks for joining me and I hope you found this information helpful!

P.S. If you enjoyed this topic and want to learn more, get our free retirement guide, “What To Do In A Down Market“.

P.P.S. Feel free to submit questions here for a chance to have them answered!

  • Sandy and Thomas C.
    Sandy & Thomas C. are clients of Johnson Brunetti and received no compensation for their statement.

    “We always felt our financial needs were in very capable hands. Alex Angst is great to work with. Our advisor always made us feel he had our best interests at heart and explained things so we could understand them.”

  • Robert G.
    Robert G. is a client of Johnson Brunetti and received no compensation for his statement.

    “We’ve been clients of Johnson-Brunetti for > 10 years. We’re enjoying a comfortable retirement as a result. Many thanks to Joel and our CFP, Eric Hogarth. I wish we had plugged into this decade approach back when we were in our 30s.”

  • Lisa D.
    Lisa D. is a client of Johnson Brunetti and received no compensation for her statement.

    “Working with Johnson Brunetti has had a positive impact on my life by providing me with the knowledge, confidence, and peace of mind to move forward with my retirement plans. The process of getting to this point, through their guidance, has been informative and pleasurable.”

  • Ken D.
    Ken D. is a client of Johnson Brunetti and received no compensation for his statement.

    “I view your company as one that puts my interests first. I think that is very uncommon and very refreshing. “

  • Jeanne P.
    Jeanne P. is a client of Johnson Brunetti and received no compensation for her statement.

    “Matt does an awesome job! So easy to understand and he listens to our concerns and addresses them! happy I chose your firm!”

  • Anonymous
    This testimonial was provided by a client of Johnson Brunetti and received no compensation for their statement.

    “I have been pleased with the help and service I have received from the company. I have met several team members on Eric’s team and have found all of them very well prepared to meet with me when reviewing my portfolio. I always feel that I am an important customer and appreciate that very much. I hope the firm continues to focus on the customer and maintains its great service. I think you do a great job for someone like me!!!! I’m happy I chose your firm!”

    Johnson Brunetti
    Welcome to Our New Website!
    Everything was designed with you in mind, making our retirement planning resources more easily accessible to you.
    Check out your new resource center, where everything can be organized by article type or topic
    Are you ready to speak with a financial advisor?
    Johnson Brunetti

    Investment Advisory Services offered through JB Capital, LLC.
    Insurance Products offered through JN Financial, LLC.
    Atlanta • Boston • Hartford | Tel: 800-208-7233

    JB Capital LLC is a federally registered investment adviser under the Investment Advisers Act of 1940. Registration as an investment adviser does not imply any level of skill or training. Information presented is for educational purposes only and is not intended as an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies.

    JB Capital's Form ADV | Disclaimer | Privacy Notice | Client Relationship Summary

    *Information about our Affiliation with the UConn Huskies

    Johnson Brunetti is a sponsor of WFSB Better Money, WCVB Better Money Boston, WSB-TV Better Money Atlanta, WTNH Money Wisdom, and WTIC Money Wisdom.