If you bail out of stocks now, stay out

— -- Q: I'm 47 years old and tired of losing money on stocks. Should I put all my money into bonds?

A: You're not alone. My e-mail box is increasingly getting reader comments bearing the same message: "I don't want to own stocks any more." And that's a normal response, unless you like having your hand in a financial meat grinder.

The stock market has been downright ugly. And, as if you don't already know, the Standard & Poor's 500 stock index has lost about half its value since it topped out in October 2007.

And nothing you've been told about investing has helped you.

Diversification, while protecting you from stock-specific implosions, hasn't prevented you from taking big losses. The buy-and-hold approach has only created deeper and deeper losses.

Dipping into so-called alternative investments, like oil and metals, has been devastating. Buying foreign stocks has been brutal, too. Picking so-called cheap stocks has been disastrous because these stocks just get cheaper and cheaper. And stock pickers and market timers, afraid of missing rallies, keep getting burned over and over again; they're at risk of losing more than if they had just remained invested.

This bear market is in the process of making all investors look like fools.

Given the extent of the pain and lack of safe havens, I understand if you're about to give up on stocks. If the economy takes a deeper dive than anyone expects, selling your stocks could save you from even worse losses. If you've given up on the USA's future or on capitalism, then clearly, you don't want to own U.S. stocks.

But if you do sell, the way I see it, you should take a vow never to buy stocks again. If you sell all your stocks now, you've demonstrated you're not prepared for the gut-wrenching pain of watching capitalism at work. Capitalism isn't pretty, especially when it's on the ropes and looking for a towel from the government. The process involves companies exploding and scattering employees, many of whom start from scratch with new ideas and new ways to create useful goods and services. It's ruthless.

The risk of stock investing, something everyone seemed to have forgotten when stocks were going up, is huge. If you sell your stocks, you must acknowledge that you're not prepared to handle the risk. You'll most likely find yourself in this same situation again. If this bear doesn't get you, the next one will.

Just know that by taking less risk, by owning bonds instead of stocks, you need to be prepared for a lower return, too. That's the way it has worked over time.

But if you haven't completely lost faith in the system, hang on. If you you've lost your job, then yes, you probably need to sell stocks to raise cash. Also, make sure that your portfolio is right for you.

You should know how much risk you can swallow and craft your portfolio in a way to get you the top returns to match the risk you're taking. Maybe that means dialing back your risk, by increasing your exposure to Treasury securities and reducing your allocation of stocks.

Keep your fees low, and if you don't know what you're doing, get help from a professional or by studying yourself. If the system survives, investors who stick with stocks will reap large returns over time. And when I say over time, I mean it. It could be years before a patient investors see rewards.

It's a decision only you can make. My advice is once you make it, stick with it.

Matt Krantz is a financial markets reporter at USA TODAY and author of Investing Online for Dummies. He answers a different reader question every weekday in his Ask Matt column at money.usatoday.com. To submit a question, e-mail Matt at mkrantz@usatoday.com. Click here to see previous Ask Matt columns.