In 2026, it can feel like each time the market takes one step forward, it snaps back just as quickly, unable to find the footing needed for a prolonged rally. The worry then becomes that if stocks can’t rebound from a broad sell-off, a bear market may loom, which would be the S&P 500 (SNPINDEX: ^GSPC) falling by 20% or more from its recent highs.
If that’s the case and we enter a bear market, history suggests there’s one move to make that could be the single best investing decision.
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First, what not to do
When stocks are sliding off a cliff, it can feel like making some kind of move is better than doing nothing. That can cause many investors to panic-sell, which history suggests is ultimately one of the worst decisions an investor can make.
For example, according to Hartford Funds, from 1996 to 2025, surprisingly, 48% of the best days for the S&P 500 occurred during bear markets. That’s a significantly higher percentage than 28% of the best days for the S&P 500 occurring during the first two months of a bull market, and 24% of the best days occurring during the rest of the bull market.
Looking at some figures also shows that panicking and selling can cost more than most people think. As a hypothetical, if someone had invested $10,000 in the S&P 500 in 1996 and left it untouched, by 2025 it would be worth $192,167. Missing the 10 best days, however, reduces that total return by 56% to $85,490. Missing the 20 best days drops that return down to $49,551, and missing the 30 best days would leave someone with $31,123.
What to do in preparation for a bear market
Corrections and bear markets come with the territory for investors. The good news is that they tend to not last long, and the gains of a bull market easily exceed the losses of a bear market. According to Hartford Funds, the average duration of a bear market is less than 10 months, while the average length of a bull market is 2.7 years. On average, stocks also lose 35% of their value during a bear market, while the average gain for stocks is 112% during a bull market.
That means one of the best moves an investor can make is to already have a portfolio in place that lets them sleep well at night. During a sell-off, someone may start dumping shares of riskier stocks or multiple stocks in a single sector that they were too heavily concentrated in. Having a diversified portfolio already established before a bear market, however, may offer greater protection against the urge to panic-sell.
