The investing decisions you make during a market crash will impact your investment returns forever. If you make the right decisions in a falling market, you can profit handsomely. Here’s how it works.

According to Bloomberg, the S&P 500 is up over 16% year-to-date. But that doesn’t mean this will last forever. In fact, many believe we’re right on the cusp of another bear market.

Now here is something that is far more important. How you handle your stock market investments during a market crash is arguably the single most important determinant of your investing performance over your lifetime.

The fact is, however, that many people lose money (and lots of it) during a stock market crash, but it does not have to be so. So let’s take a look at a possible bear market, and how we can profit during an upcoming down market.

What is a Bear Market?

Generally speaking, a bear market is when the cost of a financial investment falls a minimum of 20% or more from its 52-week high. The Dow Jones Industrial Average hit its record high of 27,088 recently. If it were to fall 20%, down to 21,670, it would be considered in a bearish market. In stocks, a bear market is measured by the Dow, the S&P 500, and the NASDAQ. In bonds, a bear market might take place in U.S. Treasuries, corporate bonds, or municipal bonds.

What Are the Benefits of a Bear Market?

Cheap Stocks = Massive Gains Over Time

If you act effectively, by not selling and rather continuing to purchase stocks, the more bear markets you experience as an investor, the higher the probability that you’ll eventually retire with a bigger nest egg. In other words, years of underperformance tend to be followed by years of overperformance. And those years of underperformance are an excellent opportunity to purchase shares inexpensively.

Other Investors Are Scared of the Stock Market

There is a simple reason why so many investors and even professional money managers are scared of the stock market–in the short term, stock prices seem arbitrary. Up one day and down the next, watching the ticker every second the market is open can cause one to wonder just what in St. Peter’s name is going on. Warren Buffett described this phenomenon like only Warren Buffett can:

“In the short run, the market is a voting machine but in the long run it is a weighing machine.”

Actually, Benjamin Graham first said this, and it has stuck with Mr. Buffett, who repeats it often. But the wisdom behind this statement should be taken to heart.

In the short term, stock prices reflect all kinds of noise. The Fed Chairman says this or that, and stocks fluctuate. Unemployment numbers come out, and the market reacts. A politician says something to get elected, and the stock market traders do their thing. The point is that in the short term (I’d say one year or less), stock prices are often the result of factors that do not bear on the long-term value of the enterprise.

When viewed long term, however, the market truly does reflect the underlying value of public companies. By long term, I mean really long term (ten years or more). Stocks can be undervalued or overvalued for a decade (see 1960s or 1990s). But given enough time, stocks will reflect the underlying value of the corporation that issued the security.

Related: 5 Golden Rules for Choosing the Best Stock

Investors Sell on Fear and Buy on Greed

While most would not quarrel with the above comments, many do not take them to heart. It is not easy to hold on to your investments when they fall 40%. You start to lose confidence in your investing decisions. Then you start to wonder if there has been some seismic shift in the markets.

Remember the Internet bubble? I recall investors talking about how the world was totally different with the Internet, and they used this lie to convince themselves to buy stocks of dot com companies with zero revenue. Remember the housing bubble? Folks would tell me that they are not making any more land, so prices must keep going up. Those folks are renting now and proclaiming that owning a home is NOT the financially prudent thing to do.

The point is that many investors do exactly the opposite of what they should do. When stocks are going up, they buy, buy, buy. When the markets crash, out of fear, they sell, sell, sell. All I can say is that this is wrong, wrong, wrong.

You Learn Your Own Risk Tolerance

A market crash presents a great opportunity to determine just what your risk tolerance is. Many mutual fund companies and brokerage houses offer a short survey to help you determine your risk tolerance.

The survey asks questions like what you would do if the market fell 20%. Would you sell, do nothing, or buy. Once you’ve answered these questions, the survey suggests an asset allocation based on your answers.

Those surveys are all well and good, but there is nothing like losing $10,000, or $100,000, or even $1 million to really gauge your risk tolerance. So after this market crash, you should know your risk tolerance very well. If you sold your investments over the past month or so, you may want to revisit your asset allocation plan. It may have been riskier than you can bear.

Intelligent asset allocation is the essential determinant of your investment returns. Handling more risk, by allocating more to stocks, leads to higher returns over the long term. We all know this.

But look, there’s no way to know how you’ll feel or how you’ll act after losing a substantial sum of cash in the stock market. So how much can you tolerate without losing sleep and bailing on your investments during a bearish market?

Among the most crucial things in investing is to understand your own self, which includes your investment behaviors. This is because we tend to be our own worst enemy. Going through a bear market is truly the only way to discover the appropriate asset allocation for oneself and what he or she can realistically handle (both mentally and financially).

Sound money management includes investing for the long term. As difficult as it may be, this means not making investment decisions based on fear. So let’s hear how you have handled your investments during this down market.

How to Profit from a Bear Market

The simple and easy way to profit from a stock market crash is to do one of the hardest things in life: nothing. “Don’t just do something, stand there!” is the best strategy, in my opinion.

Of course, this assumes that your asset allocation plan is appropriate for your investing horizon and risk tolerance. It also assumes that your investments have gone down because the market has gone down, not because you invested in some silly dot com company with no revenue.

So that’s what I’ve done. I’ve not changed my asset allocation plan. I have continued to invest on a regular basis just as before. I’ve only sold one fund, and that was for tax reasons. The proceeds will be going right back into the market to maintain my asset allocation.

That being said, there are some strategies you can take if you want to accelerate your path to financial freedom during a bear market:

1. Max Out Your 401(k) Right Now

One lesson from the bearish market of 2007 to 2009 is that if you purchase index funds at routine periods through a 401(k), you’ll succeed when the market rebounds. Those who utilized this strategy didn’t understand whether the bear would end in 2007, 2008 or as it finally did, in March of 2009.

So if you haven’t already, it’s time to bump up your contribution to max out your 401(k) this year and moving forward.

Related: Blooom Review – Finally, a Robo-Advisor for Your 401(k)

Think that’s nuts? Think you can’t afford it?

I still remember a relative who informed me that their 401(k) was cut in half by the time the last bear market ended, but all of the shares purchased en route ended up being insanely profitable when the market finally reversed and climbed higher.

By 2015, those who hung in there (like my relative) have made massive money from the cheaper shares bought during the slump. Now, throw in company matching and all of the cash dumped into the account from that, plus the shares purchased before the peak in 2006 to 2007, and you can imagine how much a portfolio could grow.

Now, it’s probably not smart to go all-in at any one time, but simply to keep investing small amounts at routine periods. After a while, you won’t even miss the money and your portfolio will be growing exponentially behind the scenes.

Related: 4 Steps to Invest in Retirement When You Have No Money

2. Look for Stocks That Pay Dividends

While the stock’s price is dictated by buying and selling in the stock market, a dividend comes from a company’s net income. If the stock’s price decreases, yet the company is strong, making a profit, and still paying a dividend, it becomes a great