Surviving a Bear Market Encounter in the Wild

Surviving a Bear Market Encounter in the Wild - graphic drawing of bear and bull head to head with stock market trend overlaid

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I don’t know if you’ve heard, but the stock market is up. I mean way up. Up to the clouds up. When I looked at the status of my 401(k) last week, I swear I almost pooped…with joy! I believe my exact words were, “Shazam!”

If you are like me, you are probably feeling like a regular Warren Buffet right about now. I mean, how can you help yourself right? You’ve waded through the tough times, and now all of your patience is paying off in spades! Still, we most of us know what is lurking around the corner – and if we don’t we ought to. Whenever we have a  buck wild, idiot chasing, uber bullish market, we know that there is a mean old bear lurking right around the corner. Here are a few tips to help you keep your wits and about you and avoid that nasty bear attack.

Bear Market Survival Tips

1) Hold Your Ground

So, you’ve got a bear market charging right at you? Have you lost your nerve – or your stool – yet? (Yep, 3 paragraphs – 2 poop jokes! Boom!) One of the best things you can do to combat a bear market is to hold your ground. Rather than getting scared and leaving the marketplace, project strength. A great way to do this is to invest for the long-term. This mindset helps to eliminate the fear caused by market fluctuations. So, hold your ground and we’ll clean up the brown underwear later. (Make that 3.)

2) Project Strength

Now that you’ve decided to hold your ground, it is also important to project strength. A bear market will eat you alive if you show weakness by turning around and running. Remember, bears are just as scared of you as you are of them. So, stand up to the bear. Waive those arms above your head. Don’t be afraid. When everybody is selling, project your strength and start buying. While it may be frightening, this is the way that real stock market winners make their money. You’ll find great deals that can make you a ton of money when the bulls return. Ride the market out and slap that fear across its lily-white face.

3) Move Slowly and Don’t Panic

When it comes to investing, fear is a killer. If you are invested in the markets, you are bound to see a bear market eventually. When you see a bear market approaching, the most important thing is that you do not panic. This is so important that I am going to repeat it: DO NOT PANIC. Take a deep breath, make well-informed decisions, and remember that when the bulls will eventually be back to rescue you. If absolutely necessary, as a last resort, you may slowly retreat into the high ground of a tree financial safe haven.

4) Plan for the Encounter

Along with long-term investing, planning for the eventual bear market encounter can help you avoid a total panic meltdown. Calmly and rationally planning a set asset allocation can be the key to surviving a bear attack. Before you find yourself in the middle of a bear attack, sit down and diversify your investments according to your tolerance for risk and your planned investment timeline. When trouble comes, sticking to this plan can help minimize your losses – as well as keep you from over indulging when the bulls show up for dinner. Remember, bulls and bears both make money. Pigs get slaughtered.


There you have it. Four tips to keep you alive and kicking. It is a wild world out there, and knowing how to react can save your financial life.


Do you have any tips for surviving a bear market encounter? Let ’em fly in the comments below!

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  1. Really couldn’t have said it better myself. Basically, bear or bull, just keep on doing what you’ve been doing all along, and don’t forget to rebalance. It might not be sexy, and it might be scary, but it’s almost always the best route.

  2. Unless you are a hedge fund or a professional investor, there really is no purpose in trying to play the market, so like you said it’s best to stand your ground. If investing long-term is your goal, there is going to be boom and busts that occur and the only way to combat it is to be in for the long haul.

  3. Put everything on auto-pilot and for the most part ignore it. (Making sure you don’t get weird fees etc.)

  4. As far as I can tell the US recovery is weak at best, and the only thing forcing the market up is the fed pumping 80 billion a month into the economy. Share prices are way overvalued compared to earnings and it looks to me like a house of cards awaiting a small gust…

    What happens when they stop printing? If I was invested in the US I would be taking some profits off the table just incase the bear comes roaring back.

  5. We’re long term investors, so we make no attempts to try and time the market. We continued to buy at regular intervals during the last (big) dip, and will do the same if (or rather, when) the next hits. FUD helps no one.

  6. Surviving? I break out the champagne. Bear markets are great as they’re just littered with great companies selling at discounted prices. I’m like a kid at a toy store with only $30 in his wallet. I want to buy so much, but I can only pick a few.

    1. That’s exactly how I feel. I don’t try to time the market, but when it gets as high as it is now, I always leave a little dry powder (cash) lying around so if a bear decides to attack, I can wait him out and kill him with the ultimate bear weapon: cash! 🙂

  7. I would totally cash out, feel so genius when it goes slightly down and then so stupid I didn’t jump back in the train when it reaches new highs, then buy too high and sell too fast again. So I automate and check every quarter or so.

  8. Like MFIJ, I am breaking out the champagne! It means you can get some solid stocks and usually at a nice little discount. That said, I could not agree more on the not panicking. Fear can do funny things, especially when you mix it with your money & investments.

  9. I am with you on standing your ground but I also believe in taking profits. If you have a stock that is up 10-20% shave some off the top. If it pulls back you made profit and can buy more at a discount. if it continues to run up you will still have some positions left.

  10. I agree with nicole and maggie with putting everything on autopilot. I invest monthly into my 401K and IRAs and try not to constantly look at it or even follow what the market is doing. As long as you’re happy with your asset allocation and that the funds have low fees and expenses…there’s no need to worry.

    1. Wow! I wish I had your guys’ confidence. I do mostly put it on auto pilot and have it rebalanced towards our retirment date, but man have we lost our asses in the past and that’s a tough thing to forget when retirement isn’t that far away.

  11. I think if you’re in it for the long haul and rebalance regularly, you’ll be fine. It is hard to watch when everyone is panicking, but taking out that money at a loss means it is a true loss.

  12. I stick with my asset allocation and keep dollar cost averaging into the market. I gone through bull and Bear markets a few times. I am in this for the long run and understand there are ups and downs as long as it averages out.

  13. Hahaha. I’m currently worried about the real bear variety. There’s lots around my work (thankfully I’m an indoor person!) and in town at home… biking, walking home from the bar, etc are all possible bear encounters!

  14. I’m going to echo what Matt said: Basically, bear or bull, just keep on doing what you’ve been doing all along, and don’t forget to rebalance. It might not be sexy, and it might be scary, but it’s almost always the best route.

    That pretty much sums it up!

  15. Excellent points, Greg! The very things I say to my clients, albeit the poop references. LOL! Bear markets are always going to happen and while we may not enjoy looking at our statement during them – we need to use them to advantage. Glorious, glorious sales. Buy them while they’re cheap!!

  16. I love a good bear market when I am flush with cash. Nothing quite like buying high quality companies when they are on sale.

  17. So I’m relatively new to investing, only a year so far. I’m actually quite looking forward to the next bear market (knock on wood). You make your money when you buy low, so I’m excited to invest more if the markets drop substantially. That being said, I’ve never been through a bear market, so I wonder how I’ll respond!

  18. Mr. Bonner says:

    Too easy! Now if I could only figure out when this bull run will end and where to put our money as the next bear approaches

  19. I am not selling right now because the bear always gets tired eventually and wanders off in to the woods to eat berries or lost hikers.

    People see the bear and run scared so I am trying to put a little extra in to my trading account to buy something when the other people panic and run and I will try and make some buys before the bull walks saunters back.

  20. Great stuff Greg! Fear leads to some real stupid decision during the down times. Managing my emotions and thinking long term are the two biggest things I focus on. That has helped me make some really good decisions to buy when everyone else is screaming “Fire…get out!”

  21. Ha love the analogy! I’ve never invested before (starting right after the car loan is paid off!) but I plan to be a long term investor with decent portfolio diversification. That said, I’m sure it must be scary to see money slipping away, and hard to resist doing something about it!

  22. Some people freak out and make drastic changes, but that’s not a good move. As you mentioned, keeping calm and carrying on will serve the best.

  23. Greg, nice picture! 🙂 You mention that you looked at your 401k report and when you saw it was up you felt good. Very good, in fact. Warren Buffett, though, would wag his finger at you and say, tut, tut, wrong response. Why? Because you’re not selling yet. You’re still buying. How would Holly feel if she went to the grocery store and saw everything she’s buying went up? Would she be happy?

    “But, Honey, you’re looking at it all wrong! Think: the value of all the groceries in our house just went up!” You’d sleep on the couch. Until the time comes close when you want to sell, you actually want prices to go down, not up.

    Don’t yell at me. Yell at Mr. Buffett. He’s the one who said that. 😉

  24. Make the stock market just one of your investments.
    Instead of only investing in stocks, diversify the type of
    investments you make so that you have better odds of making money.
    Invest in real estate and in certificates of deposit in addition to stocks so that you’ll still make money if your stock investments fail.

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