A bear market is defined as a decline of 20% or more from recent highs in a major stock market index, sustained over at least two months. Bear markets are an inevitable and normal part of investing — they’ve happened roughly every 3–5 years historically. What you do during one determines your long-term returns.
How common are bear markets?
Since 1928, the S&P 500 has experienced about 26 bear markets. The average bear market lasts about 9–10 months and sees declines of around 36%. Some are much shorter (the 2020 COVID crash lasted about 33 days), and some are much longer (the 2008 financial crisis bear lasted 17 months).
Bear markets always end
Every bear market in history has been followed by a recovery and new highs. The S&P 500 has recovered from every downturn — 100% of the time, over more than 90 years of data. This doesn’t guarantee the future, but it’s the most important historical fact for long-term investors to internalize.
What you should NOT do during a bear market
Do not sell your investments to “stop the bleeding.” Selling during a downturn locks in losses permanently. The investors who panic-sold during the 2020 crash missed one of the fastest recoveries in market history. By the time most of them felt safe re-entering, the market had already recovered.
What you SHOULD do during a bear market
Keep investing consistently — dollar-cost averaging means you’re buying more shares at lower prices. Rebalance your portfolio if needed. Review your asset allocation to make sure it matches your actual risk tolerance (not your theoretical risk tolerance when markets were up). And don’t check your portfolio obsessively — it feeds anxiety without helping.