Right Now Is the Right Time to Prepare for the Next Bear Market
Yes, stocks have been on a record-breaking tear for a long, long time. And that's precisely what makes it the perfect time to take a step back and make an adjustment with your portfolio.


No one knows exactly when the next bear market will blow through the nation’s nest eggs.
Jim Cramer, Jean Chatzky and Suze Orman won’t show up in your town wearing matching windbreakers the way the Weather Channel team does when a storm is on the horizon. By the time you realize what’s happening to your portfolio, it’s unlikely you’ll have a chance to get out or do much to protect your investments.
The best time to prepare for a bear market is when a bull market has run for many years and the market is near record highs.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
You know, like right now.
I know that’s easier said than done.
We’ve been enjoying the benefits of this bull run for more than eight years now. Which means it keeps getting harder to remember what happened in 2000 and 2008, and it keeps getting easier to put off making any changes that could rein in your current returns.
But if you’re only two or three years from retirement, you simply can’t be complacent. You can’t afford to lose sight of the amount of risk in your portfolio — or what could happen to the long-term goals those investments are there to help you attain.
If you have most of your money in the market, it’s time to take a look at your age and your asset allocation and do a reality check.
The Rule of 100 is good place to start. You just subtract your age from 100 and invest the remaining number in equities. So, for example, a typical 60-year-old would keep 40% of his or her portfolio in stocks and the rest would be in safer assets.
It’s not a set-in-stone answer, of course. You have to consider your risk tolerance, your income needs, your lifestyle goals, your family dynamics and other factors. But it will give you some idea of where you should be.
Income is everything in retirement, so it should be your priority in planning. You should have a good idea of how much you’ll need and where it’s going to come from. If you have a pension coming, and/or generous Social Security benefits, you may have a little more flexibility. You could leave a bit more money in your risk bucket with the goal of harvesting more gains when the market is up. But if most of your income is coming from your investment accounts, you have to take a couple of things into consideration:
- If it’s a tax-deferred retirement account (such as a 401(k) or 403(b)), a portion of that money actually belongs to Uncle Sam. (And sooner or later, he will come to collect — you can count on it.)
- You can’t expect or depend on your money to keep growing at the rate it is right now for the next 20 to 30 years. Those rates will always fluctuate, affecting the amount you can safely withdraw.
So, if you’re looking for less risk and more safety, where can you invest without losing out to inflation?
A lot of investors go for mutual funds — and there are even a few, such as the Grizzly Short Fund (ticker: GRZZX) and the Federated Prudent Bear Fund (BEARX), that are built to profit in a down market.
But if you’d prefer something less aggressive (and finicky) you may want to look at sturdy, recession-resistant, port-in-the-storm U.S. companies that are dividend payers. Those payments can help offset some of your losses if there is a downturn — and you might even use them to buy more shares while the price is right.
A word of warning: It can be stressful and costly to try to time the market. No one can predict with 100% accuracy why or when it will rise or fall.
Instead of focusing on the turbulence, listening to the what-ifs and making decisions based on emotions, put your energy into shoring up a retirement plan that will help you ride out the markets’ stormiest days — and every day through retirement.
Kim Franke-Folstad contributed to this article.
The appearances in Kiplinger were obtained through a PR program. The columnist received assistance from a public relations firm in preparing this piece for submission to Kiplinger.com. Kiplinger was not compensated in any way.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Chad Slagle is the President & Founder of Slagle Financial, a Midwest based financial planning firm that has offices throughout Illinois and Missouri. He is the host of “The Chad Slagle Show: Coaching You To and Through Retirement” and author of "Winning in Retirement: When Every Day is Saturday." Since 1995, Chad and his team of advisers have educated thousands of pre-retirees and retirees on how to make better decisions with their hard-earned dollars.
-
Mississippi Tax-Free Weekend 2025 Is Here: What to Know Before You Shop
Tax Holiday Just in time for Prime Day, Mississippi is celebrating a tax holiday in July. Find out how you can save on back-to-school essentials.
-
$280 Million Boost Revives Florida’s Home-Hardening Grant Program
A major infusion of state funds revives Florida's flagship home-hardening grant program to protect homeowners and potentially lower insurance costs.
-
Key to Financial Peace of Mind: Think 'What's Next?' Rather Than 'What If?'
Even if you've hit your magic number for retirement, it's hard to stop worrying about money. Giving it a clear purpose is one way to reduce financial anxiety.
-
Three Estate Planning Documents a Business Owner Can't Afford to Skip
A business owner's estate plan should protect the company and its employees as well as the entrepreneur's heirs. These three documents are critical.
-
Financial Fact vs Fiction: Why Your 'Magic Number' Isn't Actually Magical
Do you think you're diversified if you're invested in the S&P 500 and Nasdaq? Do you think your tax rate will fall in retirement? Think again — and read on for other myths that could be leading you astray.
-
Opportunity Zones: An Expert Guide to the Changes in the One Big Beautiful Bill
The law makes opportunity zones permanent, creates enhanced tax benefits for rural investments and opens up new strategies for investors to combine community development with significant tax advantages.
-
Five Ways Retirees Can Keep Perspective Through Market Jitters
Market volatility is a recurring event with historical precedents (the dot-com bubble, global financial crisis and pandemic), each followed by recovery. Here's how people who are near or in retirement can navigate economic uncertainty.
-
I'm a Financial Strategist: This Is the Investment Trap That Keeps Smart Investors on the Sidelines
Forget FOMO. FOGI — Fear of Getting In — is the feeling you need to learn how to manage so you don't miss out on future investment gains.
-
Can You Be a Good Parent to an Only Child When You're Also a Business Owner?
Author and social psychologist Susan Newman offers advice to business-owner parents on how to raise a well-adjusted single child by avoiding overcompensation and encouraging chores.
-
How Advisers Can Steer Their Clients Through Market Volatility (and Strengthen Their Relationships)
Financial advisers need to be strategic when they communicate with clients during market volatility. The goal is to not only reassure them but to also help them avoid rash decisions, deepen your relationship with them and build lasting trust.