I would just be cautious to not get overly aggressive. One problem with bear markets is that they wear down people, emotionally.I've been thinking about this a lot.
Who cares if it's a bear market, if anything that's the time to invest and grow.
If you can succeed in tough times, you can excel in good times.
I was recently reflecting on the Gen-X experience with the 2000 bear market. It was really rough on the Gen-X workforce. They had high expectations coming through the late 1990s, then entered a stretch of NO market returns for 12-13 years. If you look at the historical data, you'll see that stocks underperformed the risk-free rate (t-bills) for 13 years! And with tons of volatility.
It wasn't just a bad stretch in markets, but a very long bad stretch.
So I think as we enter a rough market, we should keep in mind that we don't know how long this bad stretch will be. It could be 1 year or 10 years. Getting overly aggressive could be a killer, because after a few more years of intense losses, an aggressive strategy could become catastrophic.
My own solution to this is to focus on strict, regimented, methodical behaviour. I'm trying to develop patterns that make my investment process boring
- sticking with the asset allocation plan
- always obey the plan (buy what's underweight for example)
- don't try to time or predict the market
- as much as I'm tempted to, don't improvise on the fly
- keep my expectations of returns low