As I said in my post about stocks the other day, you want to buy low and sell high. What that means is take a look at something else, not what the market is doing right now. Do not sell your stock positions. Either in the greater market or in your 401K. Unless you are retired and living off this money now, you can ride this trough out and the market will come back.

I have also said buy now, sell later. Well now is a buyer’s market, while it might still go lower, it’s about 5% lower than it was a week ago. That’s a bargain. So continue investing your 401K into the stock market and hang in there.

On February 1, 2009 the S&P 500 closed at about 735, today it closed at 1,943. Thus $100 invested back in 2009 would be worth just shy of $265.

Of course you’d have to hit the absolute bottom of the market to have gotten that, but investing all along the way from 735 to today, you’d have averaged about 1,350 so that’s a gain still of an average of 50% across time. Or about 5.25% year over year.

It’s a bit freaky to deal with the stock market when it starts to go bear (down), but over all, it does work. And when it is going into a bull (up) market, it’s so much fun to watch those huge gains.

So, once again I say, sit back, relax, enjoy the ride. And if you have money to add to your portfolio, now is the time to toss it into stocks. It may not be the bottom, but it’s a trough of sorts.

My next post will discuss what rebalancing your portfolio means and how to be clear what its purpose is.