The stock market has few set rules. There are, however, certain truisms that have withstood the test of time. One is that bad market periods are always followed, in time, by good market periods.

SMI was started in July 1990 during one of those bad periods. The U.S. economy entered a recession that very month. The federal budget was facing a large deficit, causing President George H.W. Bush to back down from his famous ‘’no new taxes’’ pledge. Iraq invaded Kuwait that summer, and the U.S. sent hundreds of thousands of troops to Saudi Arabia. Oil prices more than doubled, contributing to inflation.

In only our fourth issue, I was already writing to our readers reminding them that bear markets were periods of opportunity. (That’s been a familiar theme over the years, and may be relevant again in the near future if today’s market pessimists are right.) I called that editorial “Bear Market P.M.A.” Here’s an excerpt from the SMI archives from 25 years ago:

This month I want to encourage you to get ready for the bear market with a Positive Mental Attitude. I’m not saying we’re now in one, but if we are, are you prepared? Prepared to take advantage of it, that is.

First, are you prepared financially? If you haven’t been investing with borrowed money, then you can survive any bear market. You just maintain your strategy and wait it out. But that’s looking at it negatively; lower stock prices are bad only for people who have to sell. They represent temporary bargain prices for people who have the money to buy. Are you prepared to systematically add to your holdings via a dollar-cost-averaging strategy?

Second, are you prepared psychologically? Yes, short-term we have problems. But the long range outlook is exciting. Years from now, stock prices will be far higher than they are now. [Note: As I expected, stock prices resumed their long-term uptrend. Now, in 2015, the S&P 500 Total Return Index is more than ten times higher than it was in the fall of 1990, representing annualized gains of 10.3% per year.]

It is only through the down phase of market cycles that we are given the opportunity to buy at unusually low prices so we can sell later at high prices. Properly prepared for, bear markets are more of an advantage than a disadvantage. You need to embrace the mindset that a bear market in stocks is an opportunity, not a threat.

You’re happy to take advantage of seasonal sales at the local mall, aren’t you? If you’re committed to the long-term with your investing program, you should have the same “opportunity is knocking” attitude about stock prices going “on sale.”

Investment rewards, for the most part, come from developing a well thought-out strategy that focuses on quality investments, and then having the wisdom to wait for the markets to do what they have always done in the past — reward the patient investor.

We may now be living in 2015, but the risks to investors today are not unlike those of a quarter century ago. And our advice is the same as before — prepare yourself financially and psychologically for the next major buying opportunity.

The experts are, as usual, divided in their predictions. The bears are betting our current economic problems will lead to market declines of 20%-40% from current levels. The bulls are betting that all of the bears’ concerns are either exaggerated or premature, and are looking to the rest of 2015 with optimism.

I hope you’re not betting at all — but instead are dealing with market risk by diversifying according to SMI’s various trend-following strategies designed to keep you on the right side of the market’s long-term upward direction.

So, as the title of this editorial implies, a bear market can work to the advantage of the long-term investor. However, not everyone can afford to take the long view. Thus, the recognition that only “most of” our members should look forward to the next market selloff. Some are nearing, or in, retirement, and do not at all welcome the idea of lower stock prices. They’re looking for a way to reduce their risk and protect their capital. If you’re in that camp, consult this month’s cover article. In it, we provide guidelines to help you reduce your risk in a measured and objective fashion.