How to Invest During a Bear Market

By Financial Advisor Carrie McDonnell

“You make most of your money in a bear market, you just don’t realize it at the time.” Shelby Collum Davis, American businessman, investor, and philanthropist

Understandably, clients can find it difficult to invest, or stay invested, during volatile market conditions. It feels counterintuitive to put your hard-earned money into a downturned market, and even experienced investors waiver when faced with this decision. However, if you have a well-diversified portfolio of low-fee funds, staying invested is likely your best course of action to maximize your long-term returns.

An awareness of how markets have historically performed, and how our emotions affect investment decisions, can help calm investors and boost confidence during a bear market.

Market volatility is nothing new

It’s important to understand that market volatility is a natural part of the economic cycle. Historically, the 20-year rolling returns of the U.S. stock market have been remarkably steady; from 1936 through 2025, the market has never posted a negative return over a rolling 20-year period.¹ Despite navigating various economic lows—including Black Monday, the dot-com bubble, the 2008 financial crisis, and the COVID-19 pandemic—the stock market has historically bounced back. While past performance doesn't guarantee future results, history highlights the market's incredible resilience and its consistent track record of recovering from bear markets.

The cost of missing the best days

The close relationship between the market's worst days and its best days is another compelling reason to stay the course. In fact, historical data shows that roughly 76% of the stock market’s best days happen during a bear market or within the first two months of a new bull market.²

Because these explosive growth days are clustered so closely to the downturns, trying to time the market is incredibly punishing. Missing just a handful of the market's best-performing days can decimate your long-term wealth—for instance, missing the 25 best days over a recent 20-year period could slash your portfolio's potential value by as much as three-quarters.³ In short, it pays to stay.

Mastering your emotions

Human emotions often guide our investment decisions in the worst ways, especially during a down market. As prices drop, fear reigns, causing investors to withdraw at the exact wrong moment. In the "Cycle of Investor Emotion," the maximum financial opportunity tends to sit precisely where the market and your emotions hit their lowest points.

Warren Buffett’s timeless advice for investors is to be “greedy when others are fearful.” Alternatively, you can take fear and greed completely out of the equation and apply basic consumer logic: buy when the asset is on sale.

When market prices fluctuate dramatically, it’s natural to flinch. But instead of panicking, lean into historical data, tune out the daily financial news, and reach out to a financial advisor you trust.

1. iShares by BlackRock, “Long-Term Investing: Time in the Market Can Top Market Timing,” historical data through December 31, 2025.
2. Hartford Funds, “Timing the Market Is Impossible,” S&P 500 Index performance data through December 31, 2025.
3. S&P 500 20-Year Growth Analysis, as of December 31, 2025. https://www.spglobal.com/spdji/en/indices/equity/sp-500-growth/#overview