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With the Dow losing over 400 points this week alone (more than 2,000 points or 15% YTD), it’s only natural to ask yourself why you’d be in the equity market at all. Yet, before you call your brokerage or the company 401k custodian with your sell order, consider that this is in fact the best time to remain invested in the market - and to keep buying.

The bear market (what we’re experiencing now) is a lot like a liquidation sale. The shop owner (seller) just wants out, so he’s heavily discounting items to get them off the shelves. All this while, shoppers (buyers) are surveying the store and the goods for sale. Some are skeptical of the quality, durability of the product and walk away - confident there must be a catch somewhere; after all why would the items be so heavily discounted. Other shoppers are much smarter though. They have been eyeing the store products but always found them to be too expensive. Now that they’re so heavily discounted, they swoop in to get themselves a great deal. More importantly, they know what they’re buying. After all their patience and research these past few years, they know the product is solid and a great value at the now reduced price.

The moral of the story is that the market always goes through ups and downs. It’s the market’s way of going on a crash diet the day after Thanksgiving dinner. It needs to shed the excess. But this is quite often the best time to buy stock in some world-class companies whose fundamentals are still strong but whose share price has taken a beating (due to the negative economic environment).

So don’t let the market get you down. Instead, use the opportunity to reassess your long term goals, revisit the reasons why you picked your individual investments, and if the investments continue to make sense (i.e. the business fundamentals have not changed), stay the course and continue making periodic investments in the stock market. You can take comfort in knowing you’re getting a great deal on a great product - more product for the same amount you’ve always invested.

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