Markets Tumble Into Correction

Wall Street Journal ^ | 8 January 2008 | PETER A. MCKAY

[Ken H]

Dollar cost averaging can be your friend in the long run.

Agree. Take the Vanguard Wellington Fund, for example. It is basically an index of value stocks and high quality corporates & treasuries, in roughly a 2:1 ratio of stocks to bonds.

The fund started in July 1929(!), and has returned about 8.5% per year on average over nearly 70 years.

Personally, I invest monthly amounts into the Vanguard Total Stock Market Index fund and their GNMA fund, at about at a 1:1 ratio. Such index investing is simple, cheap, and has proved itself over long periods of time.

[Ken H]

I am at a loss for reason and logic! 8 consecutive days the Nasdaq has lost! The hemorrhage must stop! Mutual funds are getting hit hard!!

SOMEBODY DO SOMETHING!! QUICK!!

Wait! On second thought... aren't corrections and bear markets part of the normal stock market cycle?