Bear Market? Great!

We're in a bear market — there's no doubt about it. Most investors fear these, but many of us should be hoping for them. That may sound illogical, but if you're plunking money continually in the stock market for the next decade (or two or three), a flat or falling market is a good thing — for now. Superinvestor Warren Buffett once explained:

"If you expect to be a net saver during the next five years, should you hope for a higher or lower stock market during that period? Many investors get this one wrong. … Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices."

Over the long run, you're simply better off buying shares of great companies at fair or depressed prices than at higher prices — and bargains abound these days. Why hope to buy General Electric shares at $30 and then $40 after it rises when you'd do bet- ter buying at $20 and $10? If you plan to buy milk for the next 25 years, 10 years of falling milk prices would be welcome, right? (Unless you run a dairy.)

One of the best ways to tap the power of the stock market is to invest money methodically, adding to your savings with the knowledge that over the long run, the patient investor has usually been rewarded. Too often, people think of the market as a risky get-rich-quick vehicle.

The media present a momentary drop in the stock market as unambiguously bad and the possibility of a longer drop as reason to panic. The only ones who should panic are those who need to sell their holdings soon. That's why it's best to invest only money you can leave in the market for five or even 10 years.

Of course, we can't change the future, but we might do well to adjust how we think about it. If you're investing over the decades ahead, don't let a depressed market depress you.