When PIIGS Fly: Why You Should Root For Stock Market Drops

This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.

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Yesterday, the Dow Jones Industrial Average closed below 10,000 (9908) for the first time since November. After a staggering 70% rise from last March's lows, the blue-chip index is now down 7.6% from the 15-month high set on January 19th. I discussed the falling stock market this morning with Harry Smith on The Early Show.

The main culprits of the recent sell-off are those European PIIGS. No, not those nasty guys who whistled at us 20 years ago on Rome's Spanish Steps. These PIIGS, Portugal, Italy, Ireland, Greece and Spain, are all facing skyrocketing debt levels. Why should we care about the PIIGS? The fear is that if one country were to default on its debt, it could trigger a Lehman-type domino effect to other countries with shaky economies.

Many are wondering if the drop below 10,000 should prompt them to make changes in their portfolios. Before you fall prey to your emotions for the trillionth time, ask yourself:
• Should I really be selling?
• Has my risk tolerance changed?
• What's my game plan?

Chances are the answer to these questions are: no, no and I don't have one. To combat the last issue, here are a few tips/reminders:
• Stop whining: market dips help long-term, disciplined investors. When the market drops, you buy at lower levels - that's a good thing!
• Be self-reliant: don't count on the stock market to save for your retirement - get a plan now. The best way to weather the ups and downs of the market is to save more
• Stay your course: don't get spooked by market fluctuations
• Educate yourself - there is no magic man behind the curtain who knows what's going to happen next ... take control of your financial life

More on MoneyWatch:
•10 Tax Deductions for This Year's Return
•The Dow Under 10,000 Again. Now What?
•Investing Help for Your 401(k)
•The Shrinking Labor Force
•Why Your 'Safe' Investment Isn't So Safe
•Time to Buy a Toyota?
•Why Geithner Can't Save Treasury Bonds

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(CBS)

Jill Schlesinger is the Editor-at-Large for CBS MoneyWatch.com. Prior to the launch of MoneyWatch, she was the Chief Investment Officer for an independent investment advisory firm. In her infancy, she was an options trader on the Commodities Exchange of New York.

[RobAla]

I guess the author of this article believes that the only people impacted by a stock market drop are people 20-35 years old, people who have the time to buy low and wait for it to rise. What about retired people on fixed income, who are losing life savings when it drops? What about the people who planned to retire, but find that they can not after seeing their life savings dwindle. What a narrow minded perception on the drop of the stock market. Wow!!!!

There are many reasons not to "Root For Stock Market Drops". What about the businesses that may go under when the stock market drops. I am amazed at this lack of understanding.