Photo of Eric R. Ebbert, CFP®, MBA, CEO Eric R. Ebbert, CFP®, MBA, CEO Nov 13, 2020

One of the best parts of making investments is watching them grow. While the U.S. stock market tends to enjoy long periods of growth, the market cannot always trend upward. Every now and then, it bears down.

Bear markets can be scary, especially for new investors or investors with several short-term investments. However, for investors with diversified portfolios and a long-term strategy, a bear market, while uncomfortable in the short term, should not be too much of a concern over the long term.

What is the average bear market length?

The first item to keep in mind regarding a bear market is that, on average, bear markets are no longer than 14 months. The average bull market? 1,742 days. This is a great sign for investors. The periods of growth are not only longer during bull markets, but the growth tends to be greater than the losses during the shorter bear markets. 

Will I be OK during a bear market?

Bear markets are normal. They occur every few years almost as an act of balancing out the progress of growth. Since bear markets tend to last no longer than around one year, the only people who really need to consider the impact are the ones who have significant investments in speculative stocks and bonds and those who are about to retire, or just retired.

Diversified portfolios are balanced to help you get through periods like bear markets. When some investments in a diversified portfolio are not doing so well, other investments might continue to grow and help your savings rise.

However, if you have a lot of speculative investments or are retiring soon, you may need to adjust your strategy. The first thing you need to do is stay calm and never panic-sell. You may end up selling something at a loss that will rebound strongly in a short period of time. Second, you need to talk to a financial professional about your strategy for getting through difficult times like bear markets.

Talk to a ProVise CFP® professional about managing your investments and protecting your finances

Nobody gets excited about bear markets, but it can be reassuring to know you have a flexible plan and diversified portfolio when a bear market happens. Do you have a flexible financial plan and a strong, diversified portfolio? If this does not sound like you or you are not sure, you need to talk to a financial expert who can help. 

At ProVise Management Group, our CERTIFIED FINANCIAL PLANNER™ professionals can get to know you and your current financial circumstances, goals, risk tolerance and personal values to help you develop a plan that works for you. We can also create a written plan for you at a fiduciary standard of care. All our written plans come with an unconditional money-back guarantee. If you are unhappy with your written plan, you can return it to us, and we will refund 100% of the fee paid.

Are you ready to talk to a professional about investing? Contact ProVise today to schedule a complimentary consultation.