What is bear market asset allocation?

Bear market asset allocation generally involves dialing down the percentage of your portfolio invested in stocks and increasing exposure to government bonds or cash. The best time to switch equity for government bonds or cash is before the storm hits, meaning when valuations and interest rates soar and indexes hit new records. Timing is everything.

How to invest during a bear market?

Investing during a bear market doesn’t have to be complicated. Staying diversified, maintaining a long-term perspective, being mindful of risk tolerances and avoiding poor investment behaviors are the keys to success. Here are a few tips for how to invest during a bear market. 1. Rebalance Your Portfolio

Should you invest in a diversified portfolio during a bear market?

During bear markets, all the companies in a given stock index, such as the S&P 500, generally fall — but not necessarily by similar amounts. That’s why a well-diversified portfolio is key. If you’re invested in a mix of relative winners and losers, it helps to minimize your portfolio’s overall losses.