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/ 85.128.78.* / 2008-02-06 12:47
Take a sip of Chardonnay - or a shot of bourbon - and remember your history. We've been through this kind of wrenching volatility many times before: during the meltdown in October 1987, the S&L crisis of the early 1990s, the Asian Contagion of 1997 and 1998, and most recently, the tech bubble of 2000. These plunges are both predictable - because they're part of the bumpy ride that holding stocks is all about - and unpredictable, because you never know when they'll strike. In fact, stocks offer big returns in the long term precisely because their performance zigzags wildly at times like these. "Investors should be grateful for bear markets, because without them stocks would offer bondlike returns," says Larry Swedroe, a financial advisor with Buckingham Asset Management in St. Louis. So while it's tough to see anything good about this rocky market while watching your 401(k) shrink - the S&P 500 index is off 13% from its high in October, and the Nasdaq has shed 18% - remember that big selloffs present rare and essential buying opportunities, and the current one is no exception.