{"id":1002,"date":"2022-11-08T16:11:00","date_gmt":"2022-11-08T16:11:00","guid":{"rendered":"https:\/\/www.bellvest.ca\/alan-cameron\/resources\/5-investment-strategies-to-navigate-a-bear-market\/"},"modified":"2025-09-17T16:42:42","modified_gmt":"2025-09-17T20:42:42","slug":"5-investment-strategies-to-navigate-a-bear-market","status":"publish","type":"resources","link":"https:\/\/www.bellvest.ca\/alan-cameron\/resources\/5-investment-strategies-to-navigate-a-bear-market\/","title":{"rendered":"5 Investment Strategies to Navigate a Volatile Bear Market"},"content":{"rendered":"<blockquote>\n<p style=\"text-align: center;\"><span style=\"color: #333333;\"><em>The key to making money in stocks is to not get scared out of them.<\/em><\/span><\/p>\n<p style=\"text-align: center;\"><span style=\"color: #333333;\">\u2013 Peter Lynch<\/span><\/p>\n<\/blockquote>\n<p><span style=\"color: #333333;\">While we all prefer bull markets, it\u2019s no secret that bear markets play an active role in these cycles. Knowing how to react and adjust to both can make all the difference to your personal finances. Individuals without professional guidance seem to think taking a backseat during these perilous times is the best option available, but truthfully, conditions such as these are when you should be most involved with your portfolio.<\/span><\/p>\n<p><span style=\"color: #333333;\">Your current decisions can (and most likely will) have a significant impact on your future financial security. Before we address some of the more advanced tactics for mitigating risk and navigating economic downturns, let\u2019s address the bear in the room: what exactly is it?<\/span><\/p>\n<p><!--more--><\/p>\n<h3 class=\"heading-title\" style=\"font-size: 30px;\">Bear Market Fast Facts<\/h3>\n<p>First, let&#8217;s go over the actual traits of a bear market.<\/p>\n<h4>What happens during a bear market?<\/h4>\n<p style=\"line-height: 1.25;\"><span style=\"color: #333333;\">The general rule of thumb for defining this stage of the investment cycle is when an index falls by 20% or more from its recent high. The results of this downward spiral can vary, but it\u2019s often accompanied by negative investor sentiment and panic.<\/span><\/p>\n<h4>What causes a bear market?<\/h4>\n<p style=\"line-height: 1.25;\"><span style=\"color: #333333;\">There is no defini<span style=\"color: #666666;\">te answer, but it can range from<\/span> the one-off pandemic to more regular causes such as interest rate hikes aimed at tackling inflation. Wars, trade embargos, and market bubbles can all play a role in waking the bear.<\/span><\/p>\n<h4>How long do bear markets last?<\/h4>\n<p style=\"line-height: 1.25;\"><span style=\"color: #666666;\">Although they differ from one to the next, historical data from 1929 to 2021 suggests that bear markets last for an average of 289 days. Some have been as short as 33 days, whereas others have lasted over a year.<\/span><\/p>\n<h4>How can I get through a bear market?<\/h4>\n<p style=\"line-height: 1.25;\"><span style=\"color: #333333;\">That\u2019s what you\u2019re here to find out. Think long-term, diversify, consider defensive sectors, look for quality stocks with a strong history of raising dividends, and above all else, consider contacting a professional Family Wealth Manager.\u00a0<\/span><\/p>\n<h3 class=\"heading-title\" style=\"font-size: 30px;\">Play the Long Game<\/h3>\n<p>Time horizons may differ from person to person, but the common denominator for everyone is the market itself. History shows that these economic slumps are short-lived in comparison to the upswings that follow them \u2013 more importantly, a longitudinal study suggests that bears are ending sooner, whereas bulls are lasting longer.<\/p>\n<p><span style=\"font-size: 11px;\"><img fetchpriority=\"high\" decoding=\"async\" style=\"height: auto; max-width: 100%; width: 731px;\" src=\"https:\/\/www.bellvest.ca\/wp-content\/uploads\/sites\/23\/2025\/06\/Bear-Market-Length.webp\" alt=\"In a study put forward by Gonzales et al, it was noted that over the past two centuries bear markets have become progressively shorter, whereas bull markets have started to last longer, on average.\" width=\"731\" height=\"291\" \/><\/span><\/p>\n<p>Another aspect to be wary of is the change in stock price. According to a study put forward by Ned Davis Research, stocks have seen an average cumulative loss of 36% during bearish environments, which is completely overshadowed by the 114% average cumulative gain during bull runs.<\/p>\n<p>Market volatility and fears of a recession are among the most difficult tests of an investor\u2019s resolve, but time and time again it has been proven that holding fast to your investments through difficult conditions is one of the best things you can do for your portfolio. <a href=\"https:\/\/www.bellvest.ca\/will-beacham\/\">Will Beacham<\/a>, a Bellwether portfolio manager, suggests that \u201ctiming the market is a recipe for disaster\u201d for inexperienced investors, often leading to \u201cdisappointment once they realize they\u2019ve missed the early stages of recovery.\u201d Letting panic influence your financial decisions usually ends in regret, as short-run losses are not an indicator of long-term growth.<\/p>\n<p>Investing has always been a long game, but it becomes significantly harder to win if you sit out the fourth quarter.<\/p>\n<h3 class=\"heading-title\" style=\"font-size: 30px;\">Diversifying Your Investment Portfolio<\/h3>\n<p>Growth stocks. Bonds. Mutual funds. Certificates of deposit. Dividend yields. With so many options to choose from, it can be daunting to pick one that will serve you best. But the key is to not rely on a single category and let them complement one another. <a href=\"https:\/\/www.bellvest.ca\/family-wealth-beaches\/team\/chris-jardine\/\">Chris Jardine<\/a>, a Bellwether Family Wealth Manager, says that diversification is a \u201cconcept that never gets old, and for good reason.\u201d<\/p>\n<p>A diversified portfolio is something we suggest under most circumstances, but it can be particularly useful to help soften losses when the charts are down. Bear markets have a knack for volatility, which often sends most stocks in an index tumbling \u2013 but holding an array of equities can rebalance the winners-to-losers rate. Another option to consider is investing in international assets, which may not be impacted to the same degree by domestic market conditions.<\/p>\n<p>Beyond mixing up your equity selection, looking toward more stable asset classes can provide a level of security against unfavourable market conditions. Having access to institutional and private investment opportunities can help safeguard your capital, as they are usually more resilient to market volatility by virtue of being unavailable to the average investor. Jardine urges clients to \u201cconsider alternative strategies as part of their overall asset allocation\u201d before remarking that \u201cas this year has shown, simply holding a mix of stocks and bonds doesn\u2019t always work out.\u201d<\/p>\n<p>As stated earlier, diversification is something that should be built into your financial plan regardless of how the market is behaving. But that doesn\u2019t mean you can\u2019t readjust your portfolio during a slump to better situate yourself, your family, and your future. Fortune favours the prepared, and you should see this as a chance to address imbalances.<\/p>\n<h3 class=\"heading-title\" style=\"font-size: 30px;\">Consider Investing in Defensive Sectors<\/h3>\n<p>Shifting from growth stocks to more defensive sectors can be a sound decision during a bear market. According to Jardine, the Healthcare, Consumer Staples, and Energy sectors are more resilient to downturns and tend to outperform indices because \u201cpeople still need essentials to live \u2013 high-quality companies that provide these products see relatively little change in demand\u201d during bear markets.<\/p>\n<p>Sales for the latest sports cars vary from year to year, but the need for electricity to power your home or food to set the dinner table doesn\u2019t fluctuate nearly as much. Inflation or not, people still get sick and need gas to get to their appointments. Beacham\u2019s analysis supports this idea, acknowledging that \u201ccertain Healthcare, Staples, and Utilities exchange-traded funds are down less than half as much as the S&amp;P 500, year to date\u201d at the time of writing.<\/p>\n<p>Everyday necessities have proven to be relatively inelastic during recessions. Parking your capital in these sectors, for the time being, can protect you from some of the more drastic price swings common to other industries.<\/p>\n<h3 class=\"heading-title\" style=\"font-size: 30px;\">Invest in High-Quality Dividend Stocks<\/h3>\n<p>Taking bets on unproven companies during a bull market is risky enough, but doing so during an economic downturn is often outright foolish. Basing investments on hot tips about junior businesses where profitability is years away, if ever, may not be the greatest idea.<\/p>\n<p>It is critical to aim for strong fundamentals\u00a0when the market starts to spiral. Prudence is a priority for Jardine, and he specifically looks for \u201clarge companies with strong balance sheets that pay regular dividends.\u201d There\u2019s nothing wrong with \u201cgetting paid to wait while the market fluctuates\u201d and providing yourself with a steady stream of income in the meantime.<\/p>\n<p>Not all dividends are created equal, however. Our analysts have investigated the past and present performance of different dividend-paying stocks, and their work has shown interesting results. Their findings suggest that those with a pattern of increasing dividends per share (DPS) often outperform their competitors. Furthermore, companies that have room to grow their DPS in the coming <span style=\"color: #33475b;\">years<\/span> may offer a far better risk-adjusted return over longer time horizons. In a market where stock prices are in flux, dividend yield strategies can provide a level of comfort and certainty about your finances.<\/p>\n<p>With the benefit of hindsight, we can peer into the past for trends in more recent recessions. According to <a href=\"https:\/\/www.newconstructs.com\/wp-content\/uploads\/2015\/12\/HighROIC_Outperformed2008.pdf\" rel=\"noopener\">research put forward by New Constructs<\/a>, the companies that performed well during the 2008 Global Financial Crisis had a common thread between them: they all earned a consistently high return on invested capital (ROIC). Used to gauge a company\u2019s profitability ratio, a high ROIC reflects how much value a company is creating relative to the amount of capital put forward by investors. In other words: it proves to be a good marker of how efficiently a business is using investors\u2019 funds to generate income. Under harsh market conditions, the effective use of investment capital becomes a critical skill for companies looking to survive.<\/p>\n<p>Taking a focused approach to finding companies that are both capital-efficient and willing to increase their dividends during a bear market can help you eliminate the noise and target stocks that are more likely to drive higher equity returns.<\/p>\n<h3 class=\"heading-title\" style=\"font-size: 30px;\">Private Family Wealth Advisors<\/h3>\n<p>Ideally, it shouldn\u2019t be you staying up late over the weekend trying to map out macroeconomic conditions, parsing through dozens of stocks, or constantly rebalancing your portfolio during volatile times. Even if you are, there is no guarantee you\u2019ll come out on top. Jardine goes on to acknowledge how \u201cincredibly difficult it can be to open your monthly statements only to see your life savings seemingly melt away\u201d every thirty days.<\/p>\n<p>He does, however, address the fact that you don\u2019t have to. You can find a \u201cprofessional wealth advisor who can help guide you through the turmoil and ensure you don\u2019t do anything rash that would cause more harm in the long run.\u201d<\/p>\n<p>Hopefully, these investment tips can help you navigate the bear market until it goes back into hibernation. This only scratches the surface of the strategies our professional wealth managers are equipped with to better protect our clients\u2019 assets in uncertain times. If you\u2019re interested in having them do the same for you, <a href=\"https:\/\/www.bellvest.ca\/free-portfolio-review-family-wealth\/\" rel=\"noopener\">book a free portfolio review<\/a> today to set yourself up for success.<\/p>\n<p>{{cta(&#8216;590d8b75-481e-4312-bce9-f97f346ae44e&#8217;,&#8217;justifycenter&#8217;)}}<\/p>\n","protected":false},"featured_media":2197,"template":"","resources-categories":[20],"resources-type":[7],"class_list":["post-1002","resources","type-resources","status-publish","has-post-thumbnail","hentry","resources-categories-wealth-planning","resources-type-blog-post"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v28.4 (Yoast SEO v28.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>5 Investment Strategies to Navigate a Volatile Bear Market - Alan Cameron<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.bellvest.ca\/alan-cameron\/resources\/5-investment-strategies-to-navigate-a-bear-market\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"5 Investment Strategies to Navigate a Volatile Bear Market\" \/>\n<meta property=\"og:description\" content=\"The key to making money in stocks is to not get scared out of them. \u2013 Peter Lynch While we all prefer bull markets, it\u2019s no secret that bear markets play an active role in these cycles. 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