Which of These 5 Types of Bear-Market Investors Are You?

There has been no reprieve for stocks these last few weeks as President Donald Trump’s trade war has thrown investors, businesses, and consumers into a wild panic.

The S&P 500 is now teetering on the edge of a bear market, and Wall Street banks are raising their recession probabilities.

During times of chaos, investors react in different ways, from the emotional to the logical. While investor behavior and positioning should vary based on things like timeline and risk tolerance, financial experts Business Insider has spoken to in recent days agree on at least one thing: it’s important not to panic sell.

There’s no one-size-fits-all approach for what you should do when the market is going south, but here are a few of the investor archetypes that come out when a bear market arrives. Take a look and see which one of these categories you align with the most.

The first-timer 🐣😭

This is the first big market event you’ve experienced as a stockholder. Maybe you opened a Robinhood account recently after paying off your debt. Maybe you’re a Gen Z investor who just got into stocks in the last year or so.

You’ve been investing in easy mode up until now, buying a few shares of popular exchange-traded funds — SPY, QQQ — or stocks like Nvidia and passively watching them return double digits. But after seeing your stock and bitcoin holdings skyrocket after the election, you’re now biting your nails as they plummet.

Welcome to the world of investing. This drawdown isn’t the first and won’t be your last.

“If you have a long-term horizon, don’t stress yourself out by looking at the number every single day,” Asher Rogovy, the chief investment officer at Magnifina, said. “Over the long-term, investors are more affected by compound returns than short-term volatility.”

The permabear 🌋🐻

You’ve been warning about a market crash for months like an old man shaking his fist at the sky. Everyone laughed at you as the S&P 500 hit record highs in January this year, but who’s laughing now?

In fact, you think there’s still plenty of room for an even bigger market plunge. After all, the S&P 500 is trading at a forward price-to-earnings ratio of 20.6, which is still pricey compared to the 20.2 average since 2003, according to Truist Wealth. Valuations and expectations are still elevated, indicating that there’s still more juice to squeeze out of equity markets, Bob Elliott, the founder of Unlimited Funds and a former executive at the hedge fund Bridgewater Associates, told Business Insider.

Your strategy of diligently sticking to a well-diversified portfolio consisting of stocks (both US and international) and bonds is paying off. You’ve been worried about the rising national debt and the absurdly overvalued Magnificent Seven for a while now, and you’re now steadily stockpiling gold and defensive stocks.

The opportunity seizer 🎯🏃‍♀️

There’s that Warren Buffett quote about being greedy when others are fearful. “Buy the dip” is your motto, and you’re using the market sell-off to scoop up stocks at low prices.

This is a popular stance to take for both institutional and retail investors alike — Bank of America saw large inflows into tech and industrial stocks last week. For those who missed out on the AI-driven rally, the recent sell-off is a more affordable entry point into Big Tech stocks.

Maybe you’ve done your research mapping out different tariff scenarios and the winners and losers in each case, and have come up with a list of American companies with low international exposure to invest in. You’re also leaning into sectors like energy and healthcare, which typically perform well in times of a downturn and can help hedge against runaway inflation.

The chiller 🙈🛌

You’re protecting your peace of mind and not checking your portfolio. You’re following your regularly scheduled retirement contribution plan and maybe dollar-cost averaging. After all, you’re in this for the long haul, and 10 to 20% stock-market drawdowns are par for the course.

“Long-term, equities appreciate and typically beat inflation by a large margin,” Ashley Weeks, a wealth strategist at TD Wealth, said. “It’s time in the market, not timing the market.”

That doesn’t mean you’re not taking any action. For those planning on making a big purchase in the next year, such as a house, consider reducing your equity allocations and keeping that cash on hand, recommends Richard Saperstein, the chief investment officer of Treasury Partners.

As investors get older, it’s prudent to dial back your equity exposure, so some boomers may not be too affected by the recent market volatility. Maybe you’re nearing retirement, and you’ve been slowly liquidating your stock holdings as you get ready to leave the workforce.

“Investors with three- to five-year horizons should identify how much additional capital they would be comfortable adding to the equity market and identify entry points,” Saperstein wrote in a recent note.

The panic-seller 🫨🚮

Don’t be this type of investor.

Panic selling locks in your losses during times of temporary market downturn and can generate an annoying tax bill. And if you exit the market, you’ll most likely miss the recovery rally as you figure out the best time to buy back into the market.

“The worst thing you can do is panic and sell,” Weeks said. “You never want to liquidate holdings after a correction when they’re in a depressed position.”