What To Do During A Bear Market

Are you ready for the next bear market?

What is a Bear Market?

A bear slashes their claws downwards, and describes a market that is declining. A market is considered a true bear when stock prices fall at 20% or more, which results in low investor confidence.

• Occurs when the economy is not doing well.
• Pessimistic attitude.
• The economy is not sustainable.
• Weak market indicators.
• Insufficient disposable income.
• Low liquidity.
• International investments are discouraged.

​​​What should you do in a bear market?
​

• ​Know what you are buying and make sure you can sleep holding the stock.
• Always have an exit strategy. Plan for how you will be selling your investment.
• Time invested in the market is better than timing the market.
• Do not leave the market in a bear market. Don't panic sell, instead plan.
• Buy dips if there is surplus money. Otherwise, simply just do nothing.
• Buy more and average down your price, but don't try to catch the bottom.
• Focus on the companies with strong cash flow generation and stable balance sheets.
• Befriend Peso-Cost Averaging (PCA).
• Detach yourself from the panic and media. Remember, every bear market turns into a bull market. Stop checking your stock every day, save yourself some anxiety and the urge to sell at a loss.
• Adjust your asset allocation when the market is good, don't get too comfortable with high-risk investments.
• Remain calm, your screaming or yelling is not going to change the direction of the market. I know it is difficult but try your best.
• Review your portfolio, review your position.
• Once you have been hit with the bear market, take the beating like a champ. The only solution now is to wait it out. Just like the cryptocurrency term, HOLD—Hold On For Dear Life.

​I hope some of these tips help. Don't worry everything will pass, and everything will get better.

When things are great, we feel that nothing can stop us.
​And when things go bad, we look to take drastic action. Because emotions can be such a threat to an investor's financial health, it is important to know how to keep your head above water in the cycle of investor emotions.

You can't stop the wave, but you can learn to surf. An investor's worst enemy is not the stock market but his own emotions.