Beware The Bear Market? Here's Why Not To

With the Dow Jones industrial average and other market indexes around 20 percent below their recent peaks, the very definition of a "bear market," there's understandably a fair amount of concern among investors and everyone else who watches the economic indicators.

Update at 4:31 p.m. ET: Stocks rallied late Tuesday, sending the S&P 500 Index up 4.1 percent in the last 50 minutes of trading. Earlier, the index had fallen below the 20 percent threshold that denotes a bear market. Our original post continues:

Our colleague Jacob Goldstein over at The Planet Money blog, though, points out that that there are reasons why "the bear market may be good for your 401(k)."

As he says, "if you're a decade or more from retirement, you may ultimately benefit from the recent decline in prices. The bear market means that something you buy every month — stocks — just got a lot cheaper. And every dollar you sock away in your retirement fund today gets you a bigger share of all those future profits."

So, a little bit of optimism about otherwise dreary news.



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