I have no idea of what the market will do the next day or the next year, but I do know that you guys have 50 years of investing to do before you retire. That is what is called a “long-term” investment horizon.
Owning stocks is better than the alternative (owning “cash”) over the long haul. Stocks average around 9% annual growth over time, doubling every 8 years or so, especially if you count dividends received. Cash earns very little. Stocks have their bull (up) and bear (down) market cycles, but on average, up years outnumber down years 2 or 3 to 1. That 9% average is taking a beating since 2000, but that is all the more reason to believe that it will “return to norm” in the next decade. (fyi, the 17 years prior to 2000 averaged 17% growth which far exceeded the 9% historical norm, so we may yet have a ways down to go to offset those boom years). And if you keep buying stocks “cheap” you will then have more shares of stock to go up in value over the next decade, or two, or five when a bull market inevitably returns.
So, since you have such a long-term investment horizon, the plan is to keep putting $ into the market on a regular basis regardless of ups and downs, thereby accumulating stocks at a “lower” average price of each bear market year. This is instead of trying to “time” the market by buying and selling based upon your “foresight.” Time IN the market is what builds wealth, not TIMING the market. Timing your purchases and sales involves correctly knowing when to buy and when to sell, which means two correct decisions in a row. Not something most professionals can do for an extended period. I put $6,000 into my Edmund Burke retirement account in the early 1980s and it is worth $100,000 now, simply because it is my oldest investment and I have not touched it over the years. TIME IN THE MARKET smooths out the volatility of the up days and down days on the market.
So, my message is that you are too young to worry about bear markets. Think of them as “buying” opportunities. --Dad