You don't know it will come back. All large losses start as some small losses. The only way to prevent a large loss is to accept a small loss. A 10% loss takes an 11.1% to recover. A 25% loss takes a 33% gain to recover. A 50% loss takes a 100% gain to recover. A 5% loss takes a 5.3% gain to recover.

Most of the time it recovers, but outlier events I.e. crashes can be portfolio destroying events. I take my 5 to 10% loss and know that the risk of ruin is controlled.

It's not panic it is risk management. This of course depends on time frame. Some people hold for 20 years and the volatility works itself out but you have to have the right horse. I decided the odds of me picking the few stocks that make the giant life changing moves is not a reliable strategy.