If any of us needed further confirmation that things are bad out there, we got the signal right before the July 4 holiday -- the markets officially dipped into bear-market territory. The Dow Jones Industrial Average, Nasdaq Composite, and the S&P 500 Index are all down more than 20% from last fall's highs.

A lot of investors have lost a good chunk of their portfolio since those highs. And with a black cloud hanging over the financial sector, home values continuing to plummet, and gas prices resting comfortably above $4/gallon, the economic outlook is murky at best.

It's enough to test the nerves of even the steeliest investors.

A phoenix from the ashes
No one will deny that seeing the market fall 20% or more is unsettling. But if you're a truly long-term investor, does it really matter?

The market has endured bear markets before -- 33 of them since the Dow Jones Industrial Average was created. Since 1896, then, the market has dropped more than 20% on 33 separate occasions -- and each time, it recovered to reach new highs.

Sure, the length of time it took the market to recover those losses varied, but in most cases, the year or two directly following the end of the bear market saw a considerable jump in average share prices. That's the rebound you can't afford to miss!

Right about ... now
Investors as a whole are notoriously bad at timing the market -- so bad that you can usually count on them as a contrarian indicator. As soon as your next-door neighbor tells you he sold all of his stock holdings, the light at the end of the tunnel can't be too far away.

And it isn't.

Year-to-date, more than $15 billion has been taken out of mutual funds -- and more than $314 billion has flown into money market funds. But whether the market recovers tomorrow, next week, next month, or next year, you want to be poised to take advantage of it -- and that means being invested now.

The folks over at Dodge & Cox are living that philosophy. They've been using the recent market volatility to sell a few of their positions to make room for exciting new names.

During the second quarter, the team sold Union Pacific (NYSE:UNP) and Electronic Data Systems (NYSE:EDS) and snapped up Credit Suisse (NYSE:CS), Sherwin-Williams (NYSE:SHW), and Koninklijke Philips Electronics (NYSE:PHG).

The fund also picked up two names in the software sector -- Cadence Design Systems (NASDAQ:CDNS) and Synopsis (NASDAQ:SNPS).

In good company
If you're one of the intrepid investors trying to look at this bear market through the lens of opportunity, you're not alone.

I recently attending the annual Morningstar Investor Conference, and got the chance to hear from and talk to some of the top money managers in the business. All of them agreed that the recent market volatility has opened up new opportunities. And they all had quite a lot to say about financials -- some bad, but some surprisingly optimistic.

I've shared much more of what these managers had to say in a new online report, reserved exclusively for the Fool's Champion Funds subscribers. If you want to learn more about where the industry's top names are investing in today's uncertain market, you can check out this special report with a free 30-day trial to Champion Funds. 

Amanda Kish heads up the Fool's Champion Funds newsletter service. At the time of publication, she did not own any of the companies mentioned herein. Sherwin-Williams is a Motley Fool Stock Advisor selection. The Fool's disclosure policy, unlike Stephen Colbert, has nothing in particular against bears.