The Bear Market Survival Kit for Nervous Investors


Unless you’ve been living under a financial rock, you’ve probably heard about the recent stock market turmoil. You know what I’m talking about. That big unexpected thing that nobody saw coming spooked the market into a freefall. The news is full of gloom and doom. The usual safe-haven assets aren’t behaving as you might expect. Normally level-headed people are freaking about about their investments. And you’re sitting there wondering if the financial world really is finally coming to an end.

Even without naming the crisis, I imagine this situation sounds familiar. In fact, despite the false sense of invincibility that blissfully ignorant investors can easily build up during periods of market growth, this kind of thing happens all the time. Portfolio Charts is dedicated to studying that history beyond the pretty long-term averages. From the meager short-term drawdowns to the wildest pandemonium when stocks are truly off their meds, the data is all here in its raw visual glory.

But contrary to the media personalities that live for selling juicy drama, pious lectures, and petty schadenfreude, my goal isn’t to peddle in fear. I’ve been there and understand your concerns, and I simply want to share the knowledge and philosophy that helped me overcome my own investing insecurities.

So on this day where you may be questioning your own decisions and anxious for what the future holds, allow me to offer a little wisdom learned the hard way. Think of this short list of articles as my bear market survival kit, as they are a small window into the mindset and approach that helped me gain the confidence I needed to make money, sleep well, and live a happy life in any market condition.

Investing Philosophy

Wise investing isn’t just about numbers. It’s also about perspective. When you feel stressed, be sure you’re focusing on the right things.

The Charmed Life of a Thankful Investor

The Parable of the Lazy Brother

Quantifying and Managing Drawdowns

Understand the full historical range of downside risk ahead of time, and no matter what happens you’ll never be surprised by your investments.

How to Manage Investment Drawdowns by Thinking Differently

The Ulcer Index Is a Helpful Way to Quantify Portfolio Pain

Using Asset Allocation to Manage Risk

No portfolio is perfectly predictable, but not all portfolios are equally unpredictable. Smart asset allocation can make investing much more dependable, efficient, and sustainable.

Thinking Beyond Stocks Can Fortify Your Accumulation Plan

The Top-4 Portfolios to Recession-Proof Your Investments

Unplug, Think, & Plan

The thing about survival kits is that the best time to get one is before you need it. So where does that leave fearful investors who see current events and simply want a way out?

Turn off the TV. Stop checking your account balances. Go outside and take a walk. The absolute worst time to make a big financial decision is when you’re stressed, so the most profitable thing you can do right now is to walk away from numerical fears and re-center on the good things in the real-world all around you.

Once you feel better, try re-reading the above articles with an open mind. Even if not every idea directly works for you, I wager there are a few concepts that you’ll have developed a new appreciation for after such a rough investing patch. In my experience, proactive investors who build a plan that accounts for bad days are much happier in the long run than reactive investors who are always chasing yesterday’s news. So build a plan, execute it, and enjoy the lasting financial and emotional benefits of wise asset allocation.

It gets better. I promise. Take charge of your financial future, and the next time the market implodes you’ll be well-prepared to embrace the unknown with confidence.

Do you feel less afraid and more empowered?