Wednesday, February 28, 2007

Stocks Drop - So What?

Many people had their eyes opened yesterday when the Dow dropped 3.5%. As I have written before, the stock market is unpredictable, and so there is no need to obsess about any type of market correction. Just put a steady amount of money in your 401k or Roth IRA and invest in an broad market index fund and you will do OK over the next 20 years.

Besides, if you really diversify into something beyond stocks, you can reduce your worries even more. I didn't even bother looking at my 401k. I increased my net worth more this month from real estate investments than any drop my stock portfolio would have taken.

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