How to survive a bear attack?

Fortunately, none of us in the team have come across a bear in real life. So our collective understanding of what to do if attacked by a bear is severely limited. What we did figure after a few minutes of intense research & debate, is that depending on the bear's size and state of mind, you got 2 options.

That's not the bear we are talking about today. If you are an investor, you probably know already we are in a Bear Market. And as investors it isn’t a pretty sight to see a totally pissed off, brown grizzly violently attacking our portfolios. So what do you do when markets are dripping red every time you gather courage to check in? How do we survive this bear?

General advice on what to do in situations like this is - lie down, play dead. What this means is - Stay invested. Don't panic. Be patient. Easier said than done, right? Seeing your portfolio in a bloody mess, your instincts tell you to sell everything, stop the bleeding, and get a tattoo saying - "Thou shalt not invest.. ever again".

For many retail investors, the bear market is a scary place. It feels a lot like your hard earned money is being set on fire. Panic may be the most natural reaction. But panicking will not help you in a bear market. In fact, it usually makes things worse. Times like these are moments that "build character"

Let's get something out of the way - You and your portfolio are NOT special. Bear markets are a natural part of the investment cycle and they don't last forever. The chart below shows the % dip from the market highs - notice how often the dips happen? Knowing this is NOT the first time (and neither the last) is the first step in accepting that this is NORMAL.

Investing in the stock market is indeed a lifelong character building journey - markets will reward you, but also penalise you. The last 24 months of high quality 😉 research on WSB may have given you an impression that stocks are already halfway 🚀🌙. Well, they may in the long run if you have good stocks - but even the good ones, in the short term, experience volatility and wobble. How much more - Frankly, nobody knows. And if you know someone who claims to accurately predict market bottom, they are either lucky, a god or a total fraud.

So before you start selling all of your assets and start buying canned goods and precious metal, here are a few things you can do:

First, take a deep breath and remember that bear markets are normal. They happen from time to time, and they eventually hand the baton to the bulls. This has happened before to every person who has invested before.

Second, take a look at your portfolio and make sure you're properly diversified. If all of your eggs are in one basket, now may be as good time as any to rebalance. Putting all your eggs in one basket is almost never a good idea - one tumble and you're screwed.

And finally, stay disciplined. Now is not the time to abandon your investing strategy or try to time the market. Don't go looking for tips, tricks and hack to game the system. If your portfolio consists of companies you believe in, have researched and are reasonably comfortable owning for the long term - just hold on to them.

If you're willing to ride out the ups and downs, be patient and open to learning, even witnessing a bear market can be a rewarding experience. If you are a first time investor, count yourself lucky to be getting schooled by the bears early on.

Invest responsibly.

Pints Team.