The war in Iran and persistent inflation have clearly spooked short-term investors who like to jump into and out of the market based on the prevailing winds.  U.S. stock indices have fallen recently.  The S&P 500 is now trading below its January 2026 record high.

Still…  Savvy advisors are beginning to dust off their bear market toolkits, which allow them to take advantage of lower stock prices should they manifest in the future.

The tools can be beneficial in gloomy times, though of course are HIGHLY dependent on one’s individual situation.  The simplest is to sell stocks that are trading at prices below their original cost, can generate valuable losses that can be used to lower your tax bill.  Professional advisors can also help investors to convert some of their IRA holdings over to a Roth account at lower prices, reducing the tax bill on the conversion, and moving money into an account that will never again be taxed.

People can also gift stock shares up to a value of $19,000 per recipient ($38,000 for couples) to their children without any tax consequences.  If the stock is less valuable at the time of the gifting, more of it can be transferred during the (presumably) temporary bear market.

And finally, when stocks go on sale, bargain shoppers who can overcome their fear are able to scoop up shares at a discount—remembering, of course, that there’ is nothing to say that those stocks will not be selling at even greater discounts during the remainder of the bear market cycle.

What advisors are NOT dusting off is a market timing tool.  Getting out of the way of a bear market, moving to cash and stuffing the money under your mattress sounds like a terrific idea until you realize that you have to decide when to buy back into the market.  Should you wait until the market goes up?  How far would it have to go up before you are convinced that the bear market is over?  Chances are, THAT point would be when the market is higher than when you got out.  

Anybody who is still not convinced that this is a losing strategy should take a moment and compare the historical success of market timing vs. staying in the market.

This article was written by an independent writer for Brewster Financial Planning LLC and is not intended as individualized legal or investment advice.