Investors Urged to Diversify for Potential 20% S&P 500 Bear Market
Updated
Updated · Yahoo Finance · Aug 21
Investors Urged to Diversify for Potential 20% S&P 500 Bear Market
3 articles · Updated · Yahoo Finance · Aug 21
Summary
A potential 2026 bear market has prompted advice for investors to build diversified portfolios now, aiming to reduce the urge to panic-sell if the S&P 500 drops 20% or more from recent highs.
Hartford Funds data cited in the report shows 48% of the S&P 500’s best days from 1996 to 2025 occurred during bear markets, making it costly for investors who sell and miss rebounds.
A hypothetical $10,000 investment in the S&P 500 in 1996 would have grown to $192,167 by 2025, but missing the 10 best days would cut that to $85,490.
The case for staying invested rests on market cycles: bear markets last less than 10 months on average with 35% declines, while bull markets average 2.7 years and 112% gains.