FA Center: Don’t fear the bear. It gives you chances to pick winning stocks and beat the market.

United States

Bear markets are an investor’s best friend. During major stock-market downtrends, you stand a better chance of building up a big lead over indexed investors. If your goal is to beat the market over the long term, then bear markets play a crucial role.

Of course, even when you beat a falling market, odds are that you still lose money in absolute terms. But “beating the market” is relative, not absolute. 

There…