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The Bear Market Has Finally Arrived. Here’s How to Move On and Act Now

With the S&P 500 more than 20% off its peak, and tech stocks down even further, your first task is to take a deep breath and assess your risk.

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Illustration: Michael Kennedy for Bloomberg Businessweek

Individual investors need a new playbook—or maybe a revised version of the old one. The rally in stocks that had been boosting retirement fund balances sputtered early this year, but it came to a sharp end on June 13. That’s when the S&P 500 finally slipped into a bear market, which is generally defined as a market close at least 20% below its peak.

But honestly, it probably feels a lot worse than that for many investors—and it has for a while. The handful of megacap tech stocks that served as jet fuel for the overall market have fallen much harder since the S&P’s Jan. 3 peak, with Meta Platforms down more than 50%, Amazon.com falling 39%, and Microsoft, Apple, and Alphabet all losing about a quarter of their value. The growth-stock driven Nasdaq Composite Index has been in a bear market since March and is down 32% from its high last year.