The cleanse we all needed, part deux

You're going to think it's silly for me to continue saying that 600 point drops in the Dow are a good thing for the market, but note the five day chart, and note even harder that we still haven't closed with a 10% correction from the high of 26,617 on 26 January.  That would be 23,955, and my guess is, that will be tested today.  (Again, from "Investing 101", a bear market is official with a 20% drop from a recent high, and we are a long, long drink of hemlock away from that.)

Last week, I told readers to take heart, given the green figure in the upper right, which indicated that year-to-date, you were still way ahead.  That no longer applies today, and so you have to ask yourself, "Should I stay or should I go?"  If you have a 401(k), it makes little sense to run away given a 2% drop (imagine if Safeway offered a 2% discount on hamburger, from $3.99 a pound to $3.91 a pound - Would the savings suddenly put your long-delayed Cabo vacation back on the table?).  Commission charges to get out of a "failed" investment would cost more than what you would save (depending on how much you have invested), even if the market drops another 1000 points next week.

So now over the weekend you'll get to hear a bunch of different cliched axioms, like "blood in the water attracts sharks" and "buy the dips" and all kinds of calls for you to stay the course.  Because, of course, if everyone stays the course, the market will stop correcting.

So I'm not telling you what to do with your money, it's your money, and I'm not claiming I'm in there buying right now with both hands.  Things are still choppy, and some investors will wait to wipe the fog from their glasses before they step back in.  Opportunities to get in at the "bottom" of anything are few and far between, so keep your powder dry, a wet dog smells like a wet dog, etc.