Whenever we get a day like today — down more than 500 points on the Dow at one point — my phone begins ringing with inquiries from various media.

They always ask the same question: What should investors be doing NOW?

That is the wrong question. The proper one is: What should investors have done in the past to prepare for an event like TODAY?

Rather than repeat my usual spiel, I will simply point you towards some recent writings on that subject:

Anticipating (versus reacting to) the next black swan April 2 2011

Why the wild stock ride? August 6 2011

Smacked by big market swings, investors should alter their outlook August 19 2011

The investor’s dilemma: Earnings, valuation and what to do now September 10 2011

The bottom line remains that investing is a proactive — not reactive — endeavor. If you respond to every twitch, every news story, each turn of the wheel, you will become whipsawed.

That is no way to invest. And its no way to live life, stressing out over things that are out of your control.

What you can do is anticipate events that are cyclical in nature. These major shudders repeat every few years, so we should not be surprised by them. Construct a plan that allows you to ride out these events without panic or forced errors. You need a plan that anticipates these regular occurrences.

I strongly believe that many people are capable of doing this for themselves (No, you don’t have to pay anyone a fat fee for that). All it requires is a little intelligence, some home work, and a bit of planning

If you don’t have time to do this yourself, than read this.

Category: Investing

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

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