10 Things Savvy Real Estate Investors Do in a Bear Market

No one likes to see their portfolio fall, but bear markets are an inevitable part of investing. Savvy investors don't fear down times but rather know how to use bear markets to their advantage. If you're wondering how to keep your cool during a bear market, here are 15 things veteran investors do when markets are down.

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Savvy investors know downturns are a part of investing. Rather than panicking during a dip, experienced investors keep their cool, focusing on their portfolios' long-term performances over short-term losses.

It can be hard to keep calm when you see your portfolio down in the double digits. But remember that you only incur losses if you sell. Wait it out, and most stocks in your portfolio will likely recover.

ALSO READ: Is Buying the Dip a Good Investment Strategy?

Monitoring your investment portfolio should be part of your investment strategy in any market, but this is especially important in a bear market. If the bear market coincides with a recession, economic factors could turn a once-solid buy into a money-losing risk. Keep tabs on your investments' performances after their stock earnings each quarter.

Checking your portfolio daily during a bear market will only add to your stress levels and make you feel more inclined to sell when the market is down -- not the move a savvy investor would make.

Instead, check your portfolio periodically, once a month or once an earning season, adjusting or adding to your portfolio as opportunities present themselves or new knowledge informs your decision to sell.

ALSO READ: 3 Reasons Not to Check Your Stock Portfolio Every Day

Bear markets are tremendous buying opportunities because high-quality companies are put on sale. Warren Buffett uses bear markets to buy because stocks are trading for a notable discount. Not every stock is a value buy in a bear market, so it's incredibly important you understand the risks and opportunities of each stock as it relates to its current performance and holdings.

Diversification is a good idea no matter what the market is doing. Having all your eggs in one basket -- say, high-growth tech stocks, for example -- could disproportionately impact your portfolio in a tech downturn like we're seeing today. If you aren't diversified into other industries, use the bear market to branch into new investments, like real estate investment trusts (REITs) or the energy sector.

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Presented by Motley Fool Stock Advisor

We hear it over and over from investors, "I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of "5 Growth Stocks Under $49" for FREE for a limited time only.

No one knows how long a bear market will last or how long it will take to recover, but savvy investors know the market will eventually recover. Buying and holding stocks for the long term means you'll be able to ride out the lows of a bear market and benefit from the highs.

If you invested in the S&P 500 in 2007, just before the Great Recession, and held your investment today, you'd still be up 237%, or 8.37% on an annualized basis. And that's despite the two-year bear market (2008 to 2010), the market crash from the coronavirus pandemic (2020), and the bear market today.

ALSO READ: How Bear Markets Can Be a Blessing for Long-Term Investors

Some stocks are positioned better than others to withstand market downtowns. Strong business fundamentals, healthy balance sheets, great leadership, and opportunity for continued growth are a few key factors that make a company bear-resistant. Do what the savvy investor does and gain some exposure to these companies when the market is down.

Diversification across stocks is always a good idea, but it doesn't have to be where diversification ends. Investors can use a bear market to diversify into alternative investments like bonds, commodities, cryptocurrencies, or buying and renting real estate.

ALSO READ: Inflation is Back. Are Your Investments Ready?

Timing the market is virtually impossible. Everyone wants to buy at the bottom, but it's extremely difficult to identify when the bottom has been reached. Rather than waiting to buy worthwhile stocks and missing a valuable buying opportunity, savvy investors buy when they find a company they like for a price they feel is worthwhile.

Savvy investors build their positions in companies slowly over time. Rather than putting all $1,000 you have available to invest in 1 stock, you break the purchase into three tranches, or rounds, of purchasing. In a bear market, this structure is extra helpful because it means you can take advantage of lower pricing each time there is a dip.

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Presented by Motley Fool Stock Advisor

We hear it over and over from investors, "I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of "5 Growth Stocks Under $49" for FREE for a limited time only.

If there's one thing newer investors should learn, it's that bear markets aren't a time to be feared. Look at this as a rare opportunity to improve your chances of earning greater returns over the long haul. If you do the things savvy investors do, you'll quickly realize why bear markets can be far more of a blessing than a curse.

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