Long-Term Investing in a Bear Market | Podcast Episode #473

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Hey everybody, this is Ryan Mallory with shareplanner.com. Swing Trading the Stock Market.

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In today’s episode, we’re going to talk about long term investing in a bear market. Now this doesn’t come from an e-mail from any particular person.

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Instead it was a message that was posted in the trading block, Trading Blocks, a subscription service on sharepointer.com.

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And the question was, is that, OK to set the stage for you, the market’s been going down quite a bit and NASDAQ at the point of this time, point in time of this recording down about 10% off of its all

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time highs. So it’s been taking a steady hit, particularly over the last two weeks.

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And with it, I’ve been trading SDS. For those who don’t know what SDS is, that is an inverse ETF of the S&P 500.

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So it does the exact opposite by 2X of whatever the S&P 500 does. So if the S&P 500 is up 1%, this one’s down 2% at the S&P 500 is down 1%, SDS is up 2% you get it 2

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to one and verse ETF. So I’ve been trading that some here of late with with some respectable success we’re we’re up on at

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about 5% at the at the time that he posted this particular message and that was SDS is working great.

1:17
I’m glad I’m in it, but the impact of my long term positions have been absolutely brutal and it got me to thinking that yeah, I guess you would be really impacted by what’s going on from a long term

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It would make sense if the markets, you know, pulled back 10% and particularly if you have a lot of growth plays in your portfolio because those are going to more than likely be hit even harder than just the 10%, maybe even 20 or 30%. So there’s a lot of pain out there.

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Now, one of the things that I always advocate is that people keep their accounts separate and it’s for this very reason. You can be doing really good on your swing trading but having a pretty rough day on a long-term standpoint. So what you don’t want to do is be injecting emotions that are coming from your long-term investments into your swing trading.

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If you have them all together, you may be down overall on the day but up on your swing trading, but all you see is the fact that you’re down on the day and you’re like, crap, I’m having a bad day. No, I think you have to break them apart and say, OK, yes, I’m not having a good day in my long-term accounts.

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My swing trading is doing phenomenal. And then you can treat each one separately. You can make your decisions based off of a swing trader. You can make your long-term investments based off of a long-term investor. But when you get them intermingled, you’re looking at the whole thing all together.

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It’s going to cloud your judgment. It’s going to inject emotions where they shouldn’t be. If I’m—for me personally—if I’m looking at my day trading account, you know, and I’m speaking hypothetically because I actually don’t do day trading, but if I’m doing day trading, I want that in a separate account from my swing trading.

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If I’m doing dividends—I do do dividends—I want that separate from my long-term account. Even though both of them might even be long-term, I still want growth out of my long-term accounts and dividends, yeah, if I can get growth, that’s great. But I’d rather, you know, focus on the dividend income strategy.

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And even in the bonds I have those in separate accounts. So it’s important to keep these things separate from each other because you’re injecting emotions where they might not belong if you keep them all mingled together. Yes, I get that it’s sometimes more fun to see the total accumulation all in one pot of how much money you might have invested in the total markets.

3:34
But from an emotional and from a strategic standpoint, you want to keep them separate because you’re going to inject unnecessary emotions into your decision making. So there you have why I keep my accounts separate, but swing trading to the short side shouldn’t be viewed either as a hedge on your other accounts.

3:58
Even if you’re keeping them separate, you shouldn’t be like, OK, good. Well, at least I have SDS that’s helping to offset my long-term trades that are taking a hit right now. Yes, that’s good if it can make up for those losses, but that shouldn’t be the strategy of your swing trading. It needs to be a standalone strategy, not something that’s in conjunction with your long-term accounts or something that’s supposed to support or hedge against that, because then you’re still making decisions with your long-term accounts in mind.

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And then you’re going to start essentially making that the entry point into any decisions that you make. What are my long-term accounts doing? Oh, they’re suffering. I need to go ahead and hedge my swing trading accounts. You don’t want to take that kind of approach.

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That needs to be a standalone strategy. You know, it’s great if they’re both going up at the same time, but there’s going to be times where they may diverge as well, because with long-term you’re not necessarily looking to get short on stocks, but in the swing trading, you could get short on stocks. And if that’s helping to offset, that’s great, but it can’t be the standalone strategy as a whole.

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It’s great if it helps, but again, that’s not the objective. The objective is to grow that account separate from your long-term account without any influence on each other. And before I get to my next point, let me make sure to throw out a plug for swingtradingthestockmarket.com.

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That is my service that I provide to everybody. You can go to swingtradeinthe-stockmarket.com. It’ll take you to my SharePlanner website actually and give you a list of the different offerings. But the one that I wanted to focus on is Swing Trade in the Stock Market. And that one there is going to provide you with all of my market research that I do each and every day from daily watchlists.

5:37
Each day I provide a watchlist of stocks that I’m looking to potentially buy. And that comes from a curated list of bullish and bearish stocks that I keep handy and update once a week as well. At the end of each day, I’m going to provide you with a watchlist review of what worked on the watchlist, what didn’t work on the watchlist.

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And finally, I’m also going to provide you with mega cap updates on stocks like NVIDIA, Broadcom, Tesla, Microsoft, Apple, all those big guys. And I’m going to do stock market updates as well throughout the week. So check that out, swingtradeinthe-stockmarket.com and support the podcast.

6:13
All right, one of the things I want to focus on here, and this is really the main focus of the show, and that is most long-term traders hate—or investors, I guess I should call them investors, not traders—hate market pullbacks. And why is that? That’s because it eats at the profits that they’ve been accumulating perhaps for years.

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If you got in at the bottom of 2022 and you’re now in 2025 and you’re seeing a 10% correction, you’re getting a little bit nervous because you’re seeing a pretty big drawdown. Some of these growth plays are seeing pullbacks of 30%, 40%, even 50%. So the issue there a lot of times is the timing.

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If they got into the market rally late—instead of at 2022, they got in at late 2024—yeah, they’re feeling some pain right now. And if you didn’t take profits along the way, you’re definitely taking on some pain. So it eats away at the profits that they took for granted.

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And because they’re in a drawdown, that’s a scary time. You don’t know how long those drawdowns are going to exist. If you look at 2000 when the dot-com bubble blew up, you’re talking about an 80% decline in the NASDAQ, 80%+ decline in Microsoft. Big, big sell-off.

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And that sell-off in the NASDAQ lasted for like three years. And I think it was like another 14 or 15 years before we ever made new all-time highs again. So with drawdowns, it can be a very unnerving place. A lot of people got wiped out in the dot-com bubble.

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People who were millionaires at one point, sitting on multi-million dollar accounts, whittled away. And I know some of these people personally. Whittled away down to peanuts. Seriously. I mean, Qualcomm gave so many people false hopes back in 2000, especially those doing options trading.

8:00
And if you look at options trading right now, the parallels between that are even more exaggerated compared to the dot-com bubble. Options trading now is off the charts. And yes, there’s some people who are paper-rich right now from options trading, but they’re not managing the risk.

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And as this market continues to deteriorate, they’re going to lose all those profits—if they haven’t done so already. So the drawdowns, they’re intense, they’re emotional, you don’t know how long they’re going to go. Again, why I always talk about managing the risk. But in long-term investing, it’s a little bit different. As long-term traders—or investors, I keep saying traders, but I mean investors—we should welcome the opportunity for a stock market pullback.

8:47
And the reason for that is twofold: one, our entry of when we got into the market last from a long-term standpoint, and two, how we managed those positions along the way. So let’s talk about the entry point here.

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Let’s say for instance, on AMD—AMD at one point, I think last July or June, I can’t remember the exact month, but it was trading at like $200+ a share. I think it was almost at $220. Incredible. Right now it’s trading, you know, in the lower $100s. So it’s had a 50%+ decline—43% decline, I think, since October if I remember correctly. That’s pretty significant.

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So if you got long, you liked AMD as a long-term investment—I’m not saying that it’s a good long-term investment, I’m not—but let’s say that you got long on it at $220 and you thought at that point, oh this stuff is pretty good.

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Well, then you just got completely railroaded. I mean, you’re down significantly. So the timing does matter in long-term investing because you don’t want to be starting in a hole where you’re in at $200 and now you’re looking at a stock that’s trading at $130 because now you’re in a deep hole—huge drawdown, unnecessary hit to your portfolio.

10:07
So the entry points do matter. Are you going to get them all right? Absolutely not. But they still very much matter. So getting long during very extreme and bearish markets is critical. Because if you’re getting long at market tops like a lot of people were doing and you’re expecting to hold for the long term, there’s a good chance that you’re going to have to weather a significant sell-off down the road.

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What I would like to do in my long term—and this is what I do do—is I get long after an extreme market sell-off. Now I’ve talked about some of the indicators that I like to use for that and I won’t get into those. But when we get into some extreme—extreme—and I’m not just talking about like 10%, I’m talking about major market pullbacks like what we saw in 2022, like what we saw in 2018, like what we saw in 2008.

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Those are the moments that I want to be adding to the portfolio. I haven’t really added anything long to my portfolio in quite some time. The bulk of my buying was done between June 2022 and January 2023. That’s where I did most of my long-term purchases last time, and I haven’t really done hardly any since then except in very specific situations.

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So you have to be patient. It’s not like trading where you’re getting in and getting out. And a lot of times as investors, we want to put everything that we have into the market regardless of whether the timing is there or not. But the second thing that’s going to define your success and whether or not you’re going to be welcoming a market pullback—because right now I would love, and yes, it would hurt me financially to see a market pullback, and I have been hit by the recent selling—but the way that I’ve managed it has made it to where it’s not a big deal for me.

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In fact, I want it to even go lower because it’s going to create incredible long-term opportunities for me. And the reason why I am able to do that is because when I’m trading, I do take profits even along the way on my long-term positions.

12:07
I have long-term positions like Amazon and Google and Microsoft. Ironically, I have AMD, but I liked AMD at like $50-something—I think it was like $59 if I’m not mistaken—and I took some profits at $200+ on that long-term investment.

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Why? Because I didn’t necessarily expect it to continue to keep that momentum going forever on a trajectory straight higher. So when we did get that market pullback, I wanted to be able to know that I took some profits at higher prices, at like $200. That provides a lot of comfort knowing that. But I do still keep a core position around.

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Now what I would like for it to do is let AMD keep coming down. Let it keep falling even further because I would like at some point, when the market’s at extreme bearishness—which would likely mean that AMD is also at extreme bearishness—to be able to add more to the portfolio. We’re not at that point yet, so I’m not doing that.

13:03
I have another one, a perfect example of late: HOOD—Robinhood. I think my buy-in price on that sucker was like $9. It’s been trading as high as, well, I think it was like $16 just in the past couple of weeks. So I’ve made a good return on that one and now it’s starting to pull back some.

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So I’ve lost some of those gains, but I took some profits along the way. So I’m down to a minor core position here where I think I’ve probably sold about 75% of that position, stuck with like a 25% position now. So I would like for it to come back down because I would like to add more to it in the future.

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Not necessarily thinking that I’m going to get it at $9 or that I’ll get AMD at like $50-something dollars, but at a much lower price to where when the market does rebound—put in one of those major bottoms like what we saw in 2022 or in 2009—those stocks are going to ramp higher.

13:54
Now the other thing that I would stress is that I don’t just get into a bunch of speculative names. Yes, I consider Robinhood to be speculative. It’s not like a JPMorgan or Goldman Sachs. But those JPMorgans and Goldman Sachs, when you have an extreme market sell-off, guess what those stocks do? They also pull back in an extreme way.

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And so they’re getting penalized because of the broader market conditions. They may not even be that bad of a company—and probably they’re not. They’ve got strong fundamentals. So when they pull back like that, those are the ones that I really want to load up on. Like 80 to 90% of my portfolio, I want blue chip stocks.

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I want stocks like Amazon. I want stocks like Microsoft—stocks that are going to be around and that will rebound and will actually be the leaders of the market. And the reason for why the market rebounds. Because let’s face it, on the next market rebound after a major bearish market, it’s not going to be Robinhood that leads the charge higher.

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Yes, they may outperform the market, but they’re not going to be the reason why the market goes back up. It’s going to be because of your Apples, your Microsofts. And now with NVIDIA—as much as it’s improved—definitely because of NVIDIA too. So NVIDIA would be one that I would want to focus on from a long-term standpoint.

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So I make like 80% of my stocks more of your blue-chip kind of plays that have some growth tendencies to them. And then like the other 20%—10, 20%—I make more speculative. That’s where I got into HOOD. That’s where I got into DraftKings. Those are the kinds of names that I would look at from a speculative standpoint.

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I’m not getting in the penny stocks. I’m not getting in the stocks that have very little potential to actually go higher. I’m looking at ones that are emerging—making that transition into that blue-chip world, potentially. So I want the good stocks. I don’t want the ones that are 50/50 chance the sucker’s going to make it or not.

15:59
So in the end, we should welcome a bear market. We should welcome—as long-term traders, we should want to see at some point—a bear market come to fruition. Not necessarily right when we get into our long-term positions. That’s why the entry point is so critical.

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That’s why it’s important to get in after a bear market, not at the end of a bull market. And that’s what a lot of people do. They feel like they’ve missed the train. It’s like, well, better now than never. Or it’s just going to keep going higher and I’m going to say, I wish I got in a year ago, whatever—that’s justification.

16:37
We really want it to be tangible. We want to be able to see the market having sold off a substantial amount where there’s extreme bearishness in the market and that it’s starting to form a bottom or basing to some extent and starting a new rally. Will you get it perfect? No. I also dollar-cost average my way in.

16:54
I’m not trying to get in all at once. I’m dipping my toes in the water each and every week. I’m trying to test the temperatures and I’ll add more and more and more, but I don’t do it all at once. I don’t want to do it all at once.

17:09
I do it in minor, minor chunks at a time and then I get some really good average-in prices. Because most of the time that initial purchase tends to see lower prices. I started in June of 2022 when I was seeing some extreme readings. We didn’t bottom until October, so that means I was averaging down quite a bit.

17:30
But I wasn’t adding a full position every time. I was incrementally and even wanting it to keep going down because I was trying to get my cost basis as low as possible. And then they started taking off. So if you’re not welcoming a long-term bearish market, you’re probably doing something wrong.

17:45
You’re trading, you’re not taking profits along the way, you got in at a horrible time, and you can’t afford for there to be a drawdown. You need it to go substantially higher before you can even entertain the notion of that. And if you’re not taking profits along the way, you’re taking those profits for granted—as if they’re already yours. They’re not yours until you book the profits.

18:10
So it makes sense to reduce the risk as the stocks get inflated and they get way overpriced. Keep a core position—that’s great—because then when it comes down, you’re going to want to add more to that core position. You’re going to want to build it back up again. And so that’s what I’m waiting for. I don’t know if this market pullback that we’re in right now is necessarily the market pullback we’re hoping for, but if it continues, I’m going to be ready.

18:25
I got it. I got cash that’s ready to be deployed. If you enjoyed this podcast episode, if you’re watching me on YouTube, I would implore you to like and subscribe. And if you’re listening to me on Spotify or on Apple or on the many other platforms that I am on out there, leave me a review.

18:41
Five-star reviews are always the best. They help me out tremendously and I appreciate them quite a bit. And on the comments, let me know what your take is on the long-term. How do you approach long-term investing? How do you single out a stock that you want to buy for the long term? I would love to hear from you guys and how you’re doing it.

19:00
Plus, check out swingtradeinthe-stockmarket.com and send me your emails: ryan@shareplanner.com. I’m the one and only person that reads those emails that make the decisions on which ones to include into a podcast episode—which is practically all of them. Very few of them don’t make it, and if it isn’t, it might just be an oversight on my part. So if I haven’t included your questions, send them in again: ryan@shareplanner.com.

19:21
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19:42
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19:42
If you have any questions, please feel free to e-mail me at ryan@shareplanner.com. All the best to you and I look forward to trading with you soon.