emotions can easily take over when you see your money dwindling down. The part where you shouldn't invest what you can't lose is probably the best answer to those people panicking when the market is bearish. It's not an overnight thing guys.
Op stated the basic which I consider as theoretical aspect of trade because when the practical sets in and as you said " your money dwindling down" , then comes emotion and panic not to lose all.
Trading however is for those who have been able to go through the learning process and know what they are doing and as risky as it is, they already know how to play it out, but far better than holding, so the choice is in everyone's hand, but panicking should be totally ruled out.