The S&P fell 21% since January 2022, resulting in the worst first-half performance since 1970. With US equity markets hovering in bear market territory, it is more crucial than ever that investors keep a steady hand.
However, there is a silver lining for investors. When the S&P 500 has fallen at least 15% in the first six months of the year, it has risen an average of 24% in the second-half. All the more reasons to stay patient!
Here are three key reminders for best ways to navigate a bear market!
1) Resist the Urge to “Do Something” (unless it’s moving cash off the sidelines!)
There is no way to predict how long or how severe bear markets will last, but what we can say, is the media has a tendency to create a negative outlook and a more alarmist approach. This creates panic and an urge to “do something,” like cutting down on equity exposure or selling out of stocks altogether. Neither of those impulsive decisions is a good one. Bear markets don’t last forever, in fact, they generally are much shorter than bull markets and tend to recover faster. The key takeaway here is, bull markets are longer and stronger than bear markets.