There are many posts that bear markets are temporary and ultimately recover, that bull markets are more powerful, and that ultimately the economy (and stocks) grow, so there is “no point buying high, selling low.”
But, a recovery measures whether stock market in aggregate gets ahead, not whether an individual pre-bear market investor gets ahead.
Is it always optimal to “weather out” a bear market by holding on to your existing stocks (provided they are reasonably diversified and not penny stocks, and that you otherwise have stable income) during the market downturn?
Has it been that while the stock market has recovered, it has recovered thanks to new stocks, while old stocks went bust, and those who held on to them were left with a permanent loss? E.g. either due to paradigm shifts (old companies no longer competitive), or a recession/depression so severe that many old companies just went bankrupt or took too heavy a hammering, that left them unable to recover, leaving investors holding on to their existing pre-bear market positions “holding the bag”, despite an overall market recovery?
Sometimes money moves around during a crisis, never to come back to its original owner.
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