Navigating a Bear Market: Strategies for Thriving in Difficult Market Conditions

A bear market is an economic phenomenon that occurs when the market, index, or total stock market falls by 20% from its most recent high.[0] These markets can be periodic or long-term, but typically last for only a year—shorter than the typical bull market, which lasts seven years. During a bear market, investors may be tempted to pile into stocks in hopes of earning quick gains, but there are better strategies to navigate through bear markets. Dollar-cost averaging is one such strategy, as it involves making steady contributions to a portfolio in difficult market environments.

The current economic environment is rife with warning signs of a potential recession, with business activity and consumer spending contracting. But recent data, including a stable labor market and decelerating inflation, suggest a soft landing may still be possible.[1] Limiting the severity of an economic downturn requires inflation pressures to be eased and a stable job market with only minimal additional tightening by the Federal Reserve.[2]

Markets may also be pleasantly surprised by a modest, rather than significant, earnings decline in 2023 supported by strong revenue, cost controls, and a healthy U.S. consumer.[1] Additionally, China’s reopening is more bullish than bearish, but geopolitical tensions remain a risk.[1] At present, investing in emerging market equities with a heavy focus on China is more of a short-term trade than a long-term investment.[1]

In order to make the most of a bear market, investors should look to strategies like dollar-cost averaging.[3] This means investing the same dollar amount systematically over a period of time, which helps protect investors from market fluctuations and sudden plunges.[4] By being disciplined and making regular investments, investors can overcome fear in difficult market environments and come out strong.[4]

0. “How to survive the financial jerks of a bear market” Reader’s Digest, 21 Jan. 2023,

1. “Market preview: A feisty bear-bull debate” Insurance News Net, 23 Jan. 2023,

2. “The Bull-Bear Debate: Laying Out the Bull & Bear Cases for Stocks” LPL Financial, 25 Jan. 2023,

3. “What you need to know about investing in bear markets” Morning Brew, 31 Jan. 2023,

4. “Opportunities for investors in this bear market” Daily Herald, 5 Feb. 2023,