According to Bloomberg, recent stock market antics look strikingly similar to periods leading up to the last two bear markets. In the past two decades, declines in the average measure lasting two months or longer had only occurred twice, in the dot-com crash and the bear market.

As we all know, people lost enormous sums of money during the last two bear markets and the periods that followed.

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Wait — let me rephrase that: People who sold their investments at the bottom of the market lost a lot of money. Meanwhile, many who held onto their investments and rode the wave clawed back all of their earnings and then some. Take the popular Vanguard Total Stock Market Index Fund VTSAX , for example. While selling in a panic locks in your losses, there are other ways a bear market can cost you.

People see falling prices and their intuition tells them to stop buying. But that can be a huge mistake, says McLay.

We all wish we had a crystal ball, laments McLay. Brewer also notes that individuals who do the bulk of their investing through their work-sponsored retirement accounts are already dollar-cost averaging by default.

When the stock market rallies, we all feel rich and merry.

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But when it tanks, many want to cut their losses and move on. When prices drop, she suggests thinking of it as more of a sale than a death knell. At the end of the day, the choice is yours.

But for many disciplined investors, the choice to continue investing through a bear market and beyond is an easy one. Do you invest every month no matter what? Are you afraid to continue investing in a bear market?

Stock Market Commentary and Investment Advice

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