Charles Schwab published an article titled (How to Invest During a Bear Market) in August this year, advising investors on how to invest during a bear market. This article has been translated and organized for readers' reference. (Background: Morgan Stanley: Bitcoin has entered "autumn," suggesting investors take profits to weather the winter) (Background Supplement: Making money won't always be this easy: A letter to investors who profited in a bull market) Bitcoin officially dropped below $100,000 this week, marking a new low since June 24 of this year. The market generally believes that the alarm for this downward trend sounded officially with the "1011 major crash event" in October this year, following a single-day market liquidation of up to $19 billion. The crypto market has been sluggish since October, and today (14), Bitcoin temporarily fell below $95,000, with a drop of up to 7% in nearly 24 hours, causing many market participants to fearfully declare: this round of the bull market is really over. Although there are still optimists who believe this is just a "temporary correction," more and more analysts warn that we must face the possibility that "the crypto bear market has arrived." Historically, each bear market has been a brutal stage for the redistribution of wealth—some panic and exit at the top, while others quietly lay out their next buying point. In this context, the author cites an article published by Charles Schwab, a giant with an asset management scale exceeding $9 trillion, in August this year (How to Invest During a Bear Market). Although the original text is aimed at U.S. stock investors, the core investment wisdom extracted seems also applicable to cryptocurrency investors. Here is the original text from Charles Schwab: How to Invest During a Bear Market A bear market is part of the normal cycle of the market. Understanding its basic definition and history can help investors make more strategic decisions when a bear market arrives. Investing in a bear market actually feels counterintuitive. When traders jump into a continually crashing market, they must be mentally prepared for the possibility of "further losses" before they can expect greater rewards when the bear market ends and the bull market takes over. This medicine is bitter; many investors cannot swallow it, resulting in missing the "golden opportunity to buy low." Everyone has heard the saying, "Don't try to catch a falling knife." It sounds reasonable, but when a bear market truly arrives, this saying is of no help. Because at that time, there may be not just one knife, but "a sky full of knives" for a long time. However, from another perspective: a falling stock only feels like a knife if you catch it the wrong way. When the market is in free fall, smart investors will look to pick up as many "high-value but mispriced" stocks as possible without hurting themselves. So how should one layout to prepare for the next bull market without getting severely bitten by the bear? Understanding the basic characteristics of a bear market will be more helpful. What is a bear market? A bear market refers to a market decline driven by fundamental factors, with a drop of more than 20%. It usually accompanies weakening economic conditions, large-scale sell-offs of securities, and widespread panic and pessimism among investors. How long does an average bear market last? According to CFRA statistics on the S&P 500 index: The shortest bear market lasted only about 3 months (in 1987 and 1990). (Not counting the technical bear market entered by the three major indices due to tariff shocks in April 2025, which lasted only 3 trading days.) The longest bear market lasted from 1946 to 1949, lasting three years. Based on the past 12 bear markets, the average duration is about 14 months. How deep do bear markets usually fall? The shallowest drop was in 1990 when the S&P 500 fell about 20%. The worst was during the 2007–2009 financial crisis, with a decline of about 59% (lasting about 27 months). The historical average decline is about 34% (each bear market may be deeper or shallower than the average). Will a bear market eat up all the money made during previous bull markets? Although it is impossible to predict the outcome of a single cycle, historically: Bear markets last an average of about 14 months Bull markets last an average of about 60 months Bear markets have an average decline of about -34% Bull markets have a historical average increase of about 165% In the long run, the historical trend of the U.S. stock market is clearly tilted towards bulls. But this does not mean that bear markets won't hurt your portfolio. Especially in bear market operations, serious mistakes may still occur, such as: Trying to catch the bottom (mostly fails) Panic selling of losing positions Missing the next bull market's starting point out of fear (Reminder: Not every stock will return to its original point; all companies have the risk of bankruptcy) Bear Market Investment Strategies 1. Do not put all your funds in at once (All-in) Betting all your money at once can lead to bloodshed in your entire portfolio if you happen to hit the early stage of a bear market followed by several months of consecutive declines. Investing is about calculating risks, not gambling on luck. 2. Build positions in small increments (Dollar-Cost Averaging) Instead of guessing how deep and how long the bear market will last, it is better to invest a fixed amount (or adjust according to risk tolerance) in high-quality mispriced assets at regular intervals. Even if the price continues to drop in the short term, this can effectively lower the average cost and position you ahead of the next bull market. 3. Cast a wide net to catch potential leading stocks Most stocks will decline in a bear market, but there will always be a few stocks or industries that resist the decline and even lead the rebound when the bull market starts. Diversifying your investments (even if you only buy 12 stocks covering major industries) can significantly reduce the risk of a single company or industry facing a crisis. Diversification will not completely eliminate losses, but it can greatly increase the chances of catching strong stocks. 4. Bear markets often end in extreme pessimism and panic Many analysts point out that the end of a bear market is often accompanied by the most intense panic selling. At this time, it may actually be the brightest "green light" for entry. If you continually use dollar-cost averaging to invest, the green light is always on. Many people, however, completely exit the market out of fear or try to catch the bottom (mostly fails). Always remember: Staying in the market is more important than trying to time your entry perfectly. Conclusion When a bear market arrives, stock prices drop sharply, and market capitalization shrinks. Rationality tells us that "this is a great opportunity to buy low," but emotionally it is hard to accept that assets continuously shrink for weeks or months. Stay prudent and patient, focusing on those assets that are mispriced yet fundamentally sound. A bear market is not the season for harvesting profits, but rather the best time to "plant seeds" for the next bull market. Related Reports In the upcoming "Christmas market," which is more worth looking forward to: Bitcoin or gold? Bitwise Chief Investment Officer: Compliant ICOs will be the core narrative in 2026 and the "fourth pillar" of cryptocurrencies disrupting traditional finance. Why are investors unable to smile while the U.S. House votes at 5 a.m. tomorrow on whether to end the government shutdown? "Bitcoin falls below $100,000) Charles Schwab's guide to surviving the bear market: How to invest during a bear market?" This article was first published on BlockTempo (the most influential blockchain news media).

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