Hello everyone, it looks like we won't be able to avoid the dreaded "bear market" much longer. Therefore, it is important that we learn now how to deal with it effectively.
A bear market usually occurs when prices are down 20% or more from recent highs. We cannot predict how long it will last, but we can provide you with some information so that you are prepared in any case. 
Bears and Bulls - What's the Difference?
We've all probably heard the terms "bear" and "bull" in reference to markets. But what does it mean? As mentioned, a bear market occurs when there is a 20% or more drop in prices from recent highs. A bull market is the opposite; occurs when prices rise 20% or more from recent lows. Simply put, assets rise over an extended period of time in a bull market and fall in a bear market. 
It is important to distinguish between a bull market and a bull rally in a bear market . While in a bull market stocks are in a sustained growth trend, a rally in a bear market occurs when stock prices rise temporarily to then enter a new bear market, falling again. In this case, it may look like the end of the bear market, but in reality it has not.
What causes a bear market?
The causes of bear markets can vary, and there can also be a combination of factors that push markets lower. In general, some of these factors include:
- A weak or slowing economy
- Bursting market bubbles
- geopolitical crises
- Government intervention in economic affairs
- National or world events, for example, pandemics or wars
How long do bear markets last? Exchanges are cyclical in nature; they go up and down. According to Putnam Investments, from 12.31.48 to 12.31.21 (a period of 73 years) , the S&P 500 saw 13 bear markets . While each was different, and varied widely in duration and severity, on average they lasted 13 months and posted a cumulative return of 25.85%.
That might sound scary, but the market has always recovered. During the same period of Putnam's investigation, there were 14 bull markets that lasted an average of 50 months and recorded an average cumulative return of 136%.
How to invest in a bear market ? If you are new to investing, you may never have experienced a bear market. we have recently entered bear market territory, here are some tips you can keep in mind when investing during this period:
Diversify your portfolio
In general, during a bear market, all companies within an index, such as the S&P 500, tend to fall. However, they may not fall by the same percentage. Some companies, industries and even different types of financial products may be more or less affected than others.
Therefore, it is important to have a well-diversified portfolio to help spread risk. As they say, don't put all your eggs in one basket.
In addition, it is essential to maintain a focus on the long term and investment objectives. While it may be tempting to sell during a bear market, it's important to remember that these periods don't last forever and the market will eventually rally. Focusing on the long term means that you don't have to worry about short-term market fluctuations and stick to your investment plan.
Another useful strategy is to consider the average dollar cost. This strategy involves investing a fixed amount of money at regular intervals, regardless of the stock price. This helps reduce the impact of price fluctuations on the market, as you end up buying more assets when prices are low and less assets when prices are high.
Finally, remember that the bear market can present interesting investment opportunities. During these periods, some assets may be undervalued and present good buying opportunities. But it's important to do your research and choose solid companies with good long-term growth prospects.
In summary, investing during a bear market can be challenging, but not impossible. Diversifying your portfolio, staying focused on the long term, considering dollar cost averaging, and taking advantage of investment opportunities can help you successfully navigate these turbulent stock market periods.