Investing is Painful - Remember?

Last Updated May 6, 2010 3:19 PM EDT

I'm betting the past three days have been a reminder for us all on how painful investing was back in late 2008 and early 2009. As I type, U.S. stocks are down more than 7 percent in the three days since Monday, while International stocks have given up more than 10 percent.

Like reruns on a television show, we are already hearing about how this is the beginning of another market plunge which will, I'm sure, be closely followed by talk of a depression lurking on the horizon.

I'd love to say this fast and furious decline doesn't rattle me, but it does. Strangely, last week I wrote Dont' Feel Too Good About the Stock Market Now, but not because I knew the plunge was coming. I wrote about it when we were knee-deep in a market rally, and I was trying to keep investors' eye on the prize. Just reminding my readers that we are irrational investors and up markets are the time to rebalance and sell. Down markets are the time to rebalance and buy.

Is this the beginning of the next 50 percent off sale of the stock market? I know I don't know, yet I'm willing to accept that investing is painful and dealing with the pain is what sets the investor apart from the speculator. Much like last year, I'm also willing to continue to invest in capitalism.

My advice is to sit down, take a deep breath, and read a few columns I wrote from last year at the bottom of the last plunge.

The Great Depression Ahead? Don't Be Too Sure
How to Profit From Irrational Investors - Which is Almost Everybody
Stocks Are On Sale! Why Are So Few Buying?
Bear Markets Suck, But Don't Give Into The Pain
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    Allan S. Roth is the founder of Wealth Logic, an hourly based financial planning and investment advisory firm that advises clients with portfolios ranging from $10,000 to over $50 million. The author of How a Second Grader Beats Wall Street, Roth teaches investments and behavioral finance at the University of Denver and is a frequent speaker. He is required by law to note that his columns are not meant as specific investment advice, since any advice of that sort would need to take into account such things as each reader's willingness and need to take risk. His columns will specifically avoid the foolishness of predicting the next hot stock or what the stock market will do next month.

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