“Mom, I hate the stock market.”

My daughter was distraught from watching her investment of more than $30,000 shrink to just above $6,000 and was ready to bail out. Wouldn’t it be better to take what she has left and apply it to her mortgage, she asked?

I hesitated when I answered, but I told her what I still believe—that cashing in at the depths of the market locks in losses from which you can otherwise eventually recover. But I hesitated because it’s harder in unprecedented times to believe in the conventional wisdom about investment—that, despite downturns in the markets, over the long run investing in a diversified portfolio will pay off.

Part of the problem for my daughter, Alec (also known as Sarah), was that she invested in a mutual fund with relatively high fees, so I suggested that she put the money in a lower-cost mutual fund. You can compare the cost of mutual fund fees over time by going to the Financial Industry Regulatory Authority’s fund analyzer.

When I compared my daughter’s mutual fund to a lower-cost stock index fund, I found that in just two years she would have paid $805.51 in fees and sales charges for the fund she was in, compared with $71.18 to the lower-cost fund. That’s a big difference that has a profound impact on returns—reducing losses in a down market and increasing appreciation when the market is gaining. For instance, assuming an investment of $10,000 and growth of 5 percent, in just two years the lower-cost fund beats the higher cost by nearly $800.

Maybe 5 percent growth seems fanciful after a year in which people’s savings and investments have been cut nearly in half, but it isn’t over the long run. Alec wasn’t looking at the long run, though. She was more focused on her approaching move to New York and the cost of graduate school.

If I’d been a better financial adviser, I would have probably recommended, back when times were good, that she put enough money into a money market fund or certificates of deposit to serve as an emergency fund in case she needed cash when the markets were down. But then, I’m not a financial adviser, just a mother and a journalist.

But I’m also something else, and I think that added to my hesitation about advising her to remain invested in the markets. I’m also someone who probably will be selling my own investments in eight to 10 years, so I have a selfish interest in hoping that there will be plenty of buyers—for instance, people my daughter’s age who will be investing for their own retirements as well as investors from the developing world, such as China.

For years there have been occasional warnings that when boomers start selling off, they could drive prices down, especially if there aren’t many buyers around. In 2016, the leading edge of the baby boom will be 70.5 years old, the age at which the law requires holders of traditional (that is, non-Roth) IRAs and 401(k)s to begin to take distributions from their savings. And there will be fewer workers and savers in the United States when that happens. What if the ones who are left are so scarred by their experiences in the current recession that they hoard their money in low interest rate accounts instead of taking a chance on the stock market?

“If you enter the stock market at the beginning of a bear market, it will take a long time to recover,” said Peggy Cabaniss, president of HC Financial Advisors Inc. in Lafayette, Calif. She said she hears the same concerns about investing from her daughter and son-in-law.

On the positive side, she said, younger investors “suddenly are really beginning to believe in having emergency funds. Before, they were negative or skeptical. Who in their right mind needs six months of living expenses? They couldn’t imagine the day when people would be losing jobs because of cutbacks or layoffs or their company going under.”

Now it’s the upside that is harder to imagine, said Cabaniss. Investment dollars flood the markets when times are good and stocks are overvalued, then gush out when prices are low. It’s as though everyone looks at the admonition “buy low, sell high” in a mirror.

I felt better about my advice to stick with the market after I saw a recent analysis by the Center for Retirement Research. It showed that those who have been in the market for a long time have done relatively well, despite the recent huge losses in their portfolios, said Alicia H. Munnell, director of the center.

“We old people lost a big amount of money, but if you look at it over the time we’ve been involved in the activity, we didn’t do that badly, because we had the run-ups of the 1980s and 1990s,” she said.

Unfortunately, younger investors missed those booms. The analysis looked at three hypothetical employees who were ages 30, 40 and 50 in 1999, all of whom had begun contributing to their savings plans at age 30, putting in the same percentage and getting the same employer match.

The 50-year-old, now age 60, had contributed a total of $110,626 to the savings plan over 30 years. If she had been 100 percent invested in stock, she would have a current account balance of $327,567. While quite a decline from a balance of $656,812 in October, 2007, it’s not a bad rate of return over the years.

On the other hand, the worker who had just turned 30 in 1999 had invested $38,406 in stocks and has only $26,282 left. The worker who was 40 in 1999 and who invested $79,071 has a balance of $96,877—not as good a return as the older investor but better than the younger one. Looking at the negative results for the youngest workers, Munnell raised the question: “Are they going to be willing to save and to put money into stocks?” It will probably depend on what happens going forward in their careers and in the economy, she said.

I’ll keep an eye on my daughter.

Martha M. Hamilton, formerly with the Washington Post, writes a regular column, Your Financial Future, for AARP Bulletin Today.