Worried About a Bear Market? Just Stop, Drop, and Roll

With a bear market treacherously looming, we take a look at some “emergency measures” you can take to soften the blow.

While we’re not fully there yet, many markets have been flirting dangerously with entering bear market territory for quite some time now. The S&P 500 (NYSEARCA: VOO) is down close to 15% for the year, with a 20% loss being the dividing line between correction and bear market. The Nasdaq Composite Index has already gone into a bear market, with it currently down over 23% for the year.

If the markets do go up in flames, it could be time to bring out an emergency measure we all remember from our childhoods…

A different kind of stop, drop, and roll

Typically, the stop, drop, and roll is reserved for putting out clothes that have caught fire. It’s an easy-to-remember safety procedure designed to be put into action when your wits aren’t really about you — it should be an automatic response.

Now, courtesy of MyWallSt’s Social Media Content Producer Nicole, we have a similar fool-proof and automatic response that could help protect you should a bear market ignite.


…and map out a long-term investment thesis. A bear market is a brilliantly appropriate time to really assess your strategy and, in particular, your risk tolerance. It’s easy to talk about investing for 10 years when the market is rising every day. Use this down period to think about your goals, your investing horizon, and how much risk you’re really willing to take.


Make use of the drop that’s occurring across the market by picking up companies you value at a discount. If and when a bear market occurs — because market downturns are inevitable — some investors will panic. Quality companies can end up available at considerably lower prices than they’re potentially worth. This is a fantastic time to make use of a dollar-cost averaging strategy to pick up shares in companies you really believe in for the next 10 years and more.


You have to roll with the punches sometimes. The market will always fluctuate, that’s one of the few certainties of Wall Street. Historically, U.S. markets have always rebounded to reach all-time highs, no matter how long it takes. The average bear market lasts roughly 289 days. That’s a drop in the ocean to a long-term investor, so don’t let that short-term volatility ruin your overall strategy.