(Money Magazine) -- If the thought of opening up your mutual statement makes you squeamish or if you avert your eyes whenever CNBC comes on at the gym, it's understandable. This has been one ferocious stock market.

Not only has Wall Street been flirting with a bear market - conventionally defined as a 20% decline in the major indexes - but we're now in "the second-worst eight-year period for stocks since the 1930s," says money manager Martha Ortiz of Aronson Johnson & Ortiz in Philadelphia.

Yet there is still a bull market raging in one commodity on Wall Street: utter nonsense. Frightful times in the stock market almost always bring out rash, stupid and dangerous ideas about how to invest money. And this downturn is no exception.

For instance, a growing chorus of bears thinks that the worst is yet to come and that investors should get out of the market. After all, everyone knows stocks will keep sagging since it's obvious the economy is sinking into recession, right?

What this advice fails to mention is that you'll incur brokerage commissions and capital-gains taxes if you sell outside a 401(k) or an IRA. And once you're out of the market, you'll have to decide when to get back in - and Wall Street isn't going to send you a singing telegram announcing the time is right.

Even if the economy is headed for real trouble, don't assume that your portfolio is too. Larry Swedroe, director of research at Buckingham Asset Management, notes that the U.S. economy has experienced 11 recessions since World War II. From the first day of those economic contractions to the last, stocks still managed to deliver average gains of 7.1% vs. 5.1% for cash.

"Even if you could have predicted every recession with perfect foresight, you would have underperformed the market by moving your money into cash," he says.

While your success as an investor always hinges on your knowing what to do and when, it also depends - maybe even to a greater degree - on your knowing what not to do and what not to believe in times like these. And the fact is, there's a lot of unwise "wisdom" floating around:

"It's a stock picker's market." Instead of owning all the stocks in a broad market through an index fund, this argument goes, the way to get ahead in tough times is to invest with a really smart fund manager who will buy only those few shares that are going to rise.