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.
Emotion will hardly come in if you know your position in the market. It is either you are a trader or a holder or whichever ways, we all know exactly what we are looking out for. Sure, there is no reason to panic because the market will recover and get back good and solid, and no matter how long it takes, it is always a good thing to do most especially when you have no knowledge about trading.
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.
We need to control everything our emotion whenever the price is going down, don't let our emotion triggered to our loss, so better to keep calm always, make strategies don't just do moves without studying it or knowing the positive and negative side that will gonna happen, set goals and if possible make some sticky note in your desk about quotation in life just like don't quit and to never stop dreaming.