Disclaimer: I am not a financial advisor. None of this is financial advice. I encourage you to do your own research.

What is a bear market like? If a bull market is identified by its bull-like tendencies, your portfolio aggressively raging upwards in a sex-crazed rampage, then the bear market is much like a bear itself. It’s scary, temperamental, and your portfolio goes into hibernation until further notice. Like a mama-bear protecting her two cubs, investors sell off their stocks and desperately search for what they believe to be safer assets, like gold and consumer staples. But the damage is already done, with equities having crashed anywhere from 20-30 percent. Your portfolio is cooked, and you have one long winter ahead of you.

But a bear market isn’t always a bad thing. Just as the short-lived Covid bear market of 2020 presented a buying opportunity for investors, so too did the bear market of 2022. I had to remember that even though my portfolio was down, I still had a job, one I was now humbly grateful to have. I thought back to the start of the Covid crash just two years earlier. It had seemed like the world was ending and yet the stock market had recovered in a matter of months. With each paycheque I had been able to scoop up even more shares during the Covid bear market at a discount. Those shares ended up blooming by the end of 2020 and into 2021. Although they had temporarily gone back into hiding, I knew they would one day rise again.

Now here we were in another bear market. I had a steady paycheque so I decided to invest the same amount as I always had in the hopes that another bull market was just around the corner. Sounds easy, right? Well, it’s not so easy when you receive your paycheque, little green numbers in your chequing account, you transfer that money into your brokerage, you buy $2,000 worth of index funds and a few minutes later your portfolio drops further. You feel like all the hard-earned money you just invested is gone forever. And at the time, my money was indeed hard-earned. I had finally received a promotion into a new role and my head was spinning with a roster of global projects I was tasked with managing.

In a bull market the simple act of checking your green portfolio after a hard day’s work can be a soothing experience. You really feel like you’re getting somewhere, even if your career is stagnating, and the dopamine hit is euphoric. But in a bear market? Ha! You feel like you’re falling off the treadmill of life, your portfolio plummeting hour after hour, day after day. You wonder if you’ll ever be able to retire. Sometimes the market opens green! You keep BNN on in the background hoping that maybe, just maybe, today will be the day when the market turns around, when the euphoric days of yore will return once more. You can feel it. Today is going to be the day when we’re back, baby! But alas, it is not to be. The day closes redder than a blood-stained tomato. Days turn into weeks, weeks into months, and eventually the year closes in the red. By December 2022 the S&P 500 had returned -19.44 percent.

And my portfolio was larger than ever.

How could this be? I would like to thank a reddit meme I found for inspiring me to keep investing through the great bear market of 2022. It’s a picture of Leonardo DiCaprio as the Great Gatsby. He’s wearing a bow-tie and holding a glass of champagne towards me as if to say ‘cheers’.

“Never forget,” the caption reads. “Bull markets make you money. But bear markets make you rich.”

I kept this picture on my phone and turned to it throughout the cold, dark days of 2022. Even though my money immediately disappeared into Wall Street’s swirling abyss every time I made a purchase, I was still picking up shares at 20 percent off, just like during the bear market of 2020. With every paycheque I invested more money and contributed to my company pension. I invested my March bonus, May tax return, government rebates, any dollar I could find. And that Dividend Re-investment Plan that I had set up seven years earlier? Those dividends continued to be re-invested every quarter, this year at a discount.

I remembered the turbulent plane ride I had taken from Winnipeg all those years ago, when Andrew Hallam had taught me that a bear market is a gift for young investors. I thought back to Warren Buffet’s famous quote, to “be greedy when others are fearful.” This is what I had been preparing for. I was ready. And my strategy paid off. Although the S&P 500 would not return to its December 2021 all-time high of 4,766 for another whole year, by December 2022 big dips from June, September and October had already started to recover. As I had faithfully invested every paycheque, and my quarterly dividend payments were paid out in June and October, I happened to catch these dips on the upswing. Of course I hadn’t timed the market, I had just kept investing. Now, my portfolio was experiencing some kind of renaissance.

Repeatable steps I took that you can too!

  • Remember: while the market does go up 75 percent of the time, bear markets are normal and expected. Look at every bear market as a buying opportunity, and take solace that the Dividend Re-Investment Plan that you set up ensures that your dividends will be re-invested, picking up even more shares during the dips.
  • While your portfolio may currently be cut in half, every penny you save during a bear market could very well catapult your net worth into the stratosphere when the market inevitably recovers. And it always recovers. Don’t worry when the pundits on CNBC say “this time is different.” The market has always recovered.
  • To avoid selling in a bear market, make sure you have an investment strategy that you can stick to. Re-take Vanguard’s investor test. Are you still an aggressive investor? Or would you prefer to have some bonds and cash on hand to help you through the next bear market? Adding bonds and cash can help ease volatility.
  • As bear markets can often be accompanied by recessions and weakened economic activity, ensure you have an emergency fund to help you weather the storm.