8 Critical Questions Every Investor Should Ask When Markets Turn Red

Bear markets get a bad rap, but here’s the thing: they’re just part of the game. Since 1928, we’ve seen 27 of them—and 28 bull markets that lasted way longer. The real question isn’t whether you’ll face one, but how you’ll handle it.

The Reality Check

What counts as a bear market? A 20%+ drop from recent highs. Sounds scary, but statistically speaking, the market spends more time going up than down. Bull markets average 2.7 years; bear markets? Around 9.6 months. Do the math.

Can you predict it? No. Anyone claiming they can spot the next downturn is selling something. Market timing is the investor’s favorite delusion—and it costs them big.

The Million Dollar Mistake

Here’s where people panic and make fatal errors: pulling money out.

The data is brutal. Over the past 30 years, if you missed just the 10 best trading days, your returns get cut in half. Miss the 30 best days? Down 83%. And here’s the kicker—42% of the S&P 500’s strongest days happened during bear markets.

Think about that. The people who held through the pain ended up wealthier than those who bailed. Their assets didn’t just sit there—they positioned perfectly to catch the rebound.

What You Should Actually Do

Build a cash buffer. When asset values crater, you need less selling pressure on your holdings. Keep 6-12 months of expenses in cash or equivalents. That way, you’re drawing from reserves, not liquidating at the worst time.

Expect multiple episodes. Invest for 50 years? You’ll see roughly 14 bear markets. That’s not a problem—that’s feature, not a bug. Each one is a buying opportunity if you have dry powder.

Recession ≠ Bear Market. Only 15 of those 27 bear markets came with recessions. They often move independently. Don’t conflate the two.

The bottom line: Bear markets aren’t apocalyptic events—they’re recurring features of wealth-building. The investors who get rich aren’t the ones who perfectly time exits. They’re the ones who stayed calm, had a plan, and didn’t panic-sell into their own losses.