Why Most Investors Blow It During a Bear Market—And How You Won’t
Your portfolio’s survival—and outperformance—depends on what you do when fear peaks. Here’s how to play offense when everyone else is panicking.
It’s easy to look like a genius in a bull market.
Your portfolio is green. The headlines are optimistic. You feel like you’ve finally cracked the code.
Then the market turns.
Suddenly, the same investor who was boasting double-digit gains a few months ago is hitting the panic button. They’re glued to CNBC. Selling into weakness. Frozen by fear. Worse, they think they’re being “prudent.”
Most investors blow it during bear markets—not because of the market, but because they never built a plan for it.
If that’s ever been you, you’re not alone. But it doesn’t have to be that way again. Today I’m going to show you why investors keep failing the bear market test—and more importantly, how you won’t.
And if you stick around until the end, I’ll show you exactly how I prepare my own portfolios to not just survive downturns, but come out stronger.
The Brutal Truth: Most Investors Fail the Bear Market Test
Bear markets are not rare. We get one roughly every 5 years. Yet somehow, they keep surprising people.
Why?
Because in a drawdown, investing becomes emotional. The same assets you felt confident about last quarter now feel risky. The long-term plan suddenly seems vague. And the instinct to “do something” becomes overwhelming.
Here’s what usually happens:
The market drops.
Fear kicks in.
Investors sell to stop the pain.
The market recovers.
They miss the rebound and re-enter too late.
The result? They underperform their own investments.
DALBAR, Morningstar, and every behavioral finance study worth its salt show this over and over again: human nature is a terrible investor.
But there’s a better way.
Why the Standard Advice Falls Apart When Markets Crash
You’ve heard the platitudes:
“Stay the course.”
“Buy and hold.”
“Don’t time the market.”
All true—if you have a course to stay on.
But most investors don’t. They have a brokerage account. Maybe a few ETFs. A handful of stocks they liked on YouTube. That’s not a strategy—it’s a hope and a prayer.
When markets crash, vagueness gets punished. You need clarity.
You need to know which stocks you’re trimming, which ones you’re adding to, and which ones are in the portfolio for income, stability, or asymmetric upside.
You need to know what to do—before the panic hits.
Fear Is Not the Enemy. Lack of Strategy Is.
Every investor feels fear. I do too. But fear doesn’t have to control you if you’ve already decided how you’re going to act.
That’s where portfolio design comes in. It’s not just about owning good companies. It’s about structuring your holdings so that they can take a punch.
Here’s how I do it:
I insist on a margin of safety when buying.
I diversify across strategies—not just sectors.
I rebalance as valuations change, not based on headlines.
I always have dry powder for opportunities that arise because of the fear.
Premium members already know this. They’ve seen how we handle portfolio allocation, when we cut losers, and when we size up our winners. Nothing is guesswork. It’s all built to function in a crisis, not just in calm waters.
The Hidden Opportunity Inside Every Bear Market
Most people think bear markets are something to endure.
But if you’re clear-headed—and liquid—they can be the best wealth-building moments of your investing career.
Think about it:
Great businesses don’t stop being great just because prices fall.
Market sentiment is often wrong at extremes.
Sellers become indiscriminate.
Valuations disconnect from fundamentals.
And that’s where you step in—not with fear, but with clarity.
You can build positions in world-class businesses while everyone else is running for the exit. Not because you’re contrarian for the sake of it, but because your process gives you confidence when others lose theirs.
How I Position My Portfolios Before the Next Panic Hits
There are only two kinds of investors in a bear market: those who panic, and those who prepared.
My portfolios are built for exactly these moments. Whether it’s my Income Factory focused on generating dependable cash flow, or the Premium Portfolio stocked with high-conviction small-cap value stocks, every position is sized with downside risk in mind.
We use valuation targets to rebalance—not gut feelings. We trim when prices rise too far above intrinsic value. We buy when fear offers us discounts. And when a stock hits its target or the thesis breaks, we exit.
Every action is intentional. Every allocation reflects the current opportunity set—not the headlines.
Want the Confidence to Never Panic Again?
Bear markets are a feature, not a bug. The trick isn’t to avoid them. It’s to turn them into your advantage.
If you’ve ever felt uncertain during a market crash…
If you want to stop guessing and start acting with conviction…
If you want to see how I’m allocating right now—before the next wave hits…
👉 Then it’s time to join Premium.
You’ll get:
Full access to the Premium Portfolio
Deep-dive stock analysis reports
My real-time portfolio updates and allocations
Ongoing commentary during volatile periods
And the confidence that comes from knowing exactly what to do when everyone else is frozen.
Most investors blow it during bear markets.
You won’t.
Because you’ll be ready.