History Says This Is the Best Investing Move You Can Make if a Bear Market Is Coming

Right now, the U.S. stock market feels a little shaky. Inflation is still well above target. The Federal Reserve is on track to raise interest rates again next month. And the Iran war shows no signs of ending.

The S&P 500 (SNPINDEX: ^GSPC) is down a modest 3% in the last month, while the Nasdaq-100 is off nearly 10%.

All of this is to say that many investors are considering the possibility of a bear market right now. While earnings expectations for U.S. companies are still looking strong, there are enough concerns about the future of the artificial intelligence (AI) building boom, the biggest driver of recent economic growth, that investors are looking at ways to protect themselves.

And it's a good thing, too. The best time to think about your investment process is before something happens.

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The dip you're waiting for probably isn't the bottom

Market declines tend to trigger some of the worst investor behaviors. If stocks are declining, there's an inclination to stay away because 10% drawdowns often become 20% to 30%. It happened in 2000-2002, 2007-2009, and 2022.

But those declines also have a recent history of rebounding quickly, often before investors even noticed. These occurred in late 2018 and early 2025 during President Donald Trump's Liberation Day tariffs, and in the more extreme case of the COVID pandemic.

In other words, nobody knows whether a correction is the end or the beginning of a deeper drawdown. And even if you did know which one it was going to be, market timing requires you to be right twice: once when you decide to get out of the market and once when you later get back in. Plus, that requires a discipline many investors lack.

Automating your investing is the better process

You can still take advantage of lower share prices during bear markets by simply maintaining your monthly investing schedule. If you have money going into a brokerage account every month or every paycheck into something like a 401(k), keep doing what you're doing.

This process allows you to buy the dips and lower your average cost without worrying about whether it's the right time to trade. Plus, bear markets often last far less time than the average bull market.

If you try to time the market, there's a good chance that the rebound will have already started once you decide it's OK to return to stocks. By automating, you may not get the absolute lowest prices on your purchases, but you'll certainly get at least some at discounted prices.

As always, investing is one of the few things where doing less can yield better results.

David Dierking has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.