It’s hopelessly optimistic to believe that an investor who is shell shocked following a big loss can somehow return to investing with the confidence necessary to consistently apply even the most proven investing system. If in your heart of hearts you believe the system you are now using might fail, you’ll abandon that system at the slightest sign of trouble.

One of the reasons that bear markets are so devastating to investors is that they usually don’t end in a way that restores that shredded self-confidence. Volatility hasn’t vanished — the market still rallies and pulls back with enough uncertainty so that even if the trend is now upward, there are plenty of sickening drops to scare you into selling again...

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