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

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 is both theoretical as well as empirical support for shifting your perspective. Theoretically, it stands to reason that...