Should Investors Be Worried About Another Bear Market?

If you're worried that another market crash could be nearing, you're not alone. In this turbulent market, it's easy to let emotions get in the way and inhibit wise investing decisions.

In this segment of Backstage Pass, recorded on Jan. 5, Fool contributors Jamie Louko, Jason Hall, and Rachel Warren discuss the possibility of another market downturn and how they're approaching investing in 2022. 

Jamie Louko: I'm pretty much in the same boat as Jason and I'm on the other side of retirement. I'm a pretty young investor and I got all the time in the world.

If Jim Rogers is right and we do go into a bear market, I'm going to be buying everything in sight really, but I'm not going to try to entertain my hubris to try to predict where the market is going to be or what the market is going to do.

There's just so much short-term noise going through the market that impacts these month-to-month returns or year-to-year returns. But because of my age, I use that to my advantage and I'm looking 5, 10, 20 years out.

I'm not really focused on what's going to be happening this year unless there is a bear market and then I am plowing as much cash as I make into stocks.

Jason Hall: I love that dude, because the bottom line is that the best thing for anybody that's in their 20s is for the market to go sideways for the next 10 or 15 years.

Rachel Warren: Just buy a ton of stocks on sale. Great, high-quality business.

Hall: Guys, could you imagine like, this was me, but if you were just starting to make investments in your retirement account in 2001 for the very first time, the next 10 years, there you go.

Warren: You're set. [laughs] No, I think it's a great point and I think it's also a reminder that long-term investing looks different for each individual investor.

Your strategy and your timeline may very differ from your neighbors or your friends or your family members, and investing in the way that works for you and your financial goals, I think are very important. I thought this was really interesting.

I fall in the middle of these two trains of thought that we were getting, these predictions from Wall Street as reported on CNN versus Jim Baker [Rogers]. I think as with most things in life, you need to prepare for the unexpected.

I think that you shouldn't be panic-selling your stocks right now but I think it's also a great opportunity to be investing in companies where they are on sale, but with this underlying basis that you have a strong thesis for the company. Not just buying a stock because suddenly it's trading at a cheaper-than-usual evaluation.

Looking at companies that are trading on sale and saying, hey, this is a company that I have faith in for the next 5, 10, 15 years, and that I'm willing to hold on to throughout those ups and downs in the market. Could the bottom drop out again in 2022?

I think it's possible, but I think it's also just as possible that it could be a record year for stocks. We just don't know. I think that this is some of those headline-making predictions and prognostication we expect to see from Wall Street this time of year.

At the same time, I do think there is some increased optimism in a broader sense because we do have a stronger arsenal to fight the pandemic, one of the key factors that's continued to drive some of the volatility in the market, than we had a year ago. 

With vaccines being widely available as well as therapeutics. We've been seeing reaction today from news from the Fed, but we also know that interest rates wouldn't stay at rock bottom forever.

I think it's going to be a time of adjustment but I'm excited as we start off the new year. I'm excited to be building my portfolio and maybe get some great companies on sale, but I definitely don't plan on trying to time the market.