You Can Ride It Out, Baby

Thinking about the potential consequences of the market downturn upset me more by the minute. I ranted to my husband about not being able to retire when we want or not having enough money for our three kids to go to college.

Thankfully, in my house, there was a voice of reason: my husband's. In his usual calm and soothing way, he just kept working on our budget and yearly net-worth assessment, trying to ignore my agitated state.

Then, he finally looked up. "Baby, we don't need this money for a long time," he said. "We can ride this out."

Okay, I could lie right here and say I quickly snapped back to my senses and responded, "Oh you are so right, sweetie. What was I thinking?"

The truth is, I wanted to slap him upside his head -- in a light, loving way, of course. I mean, was he looking at the same current-balance reports?

But my husband was right to encourage me to stay calm. And for the most part, so are the experts, even if some of them work for financial services companies that have a vested interest in keeping us in the market.

My husband reminded me of our investment strategy, called dollar-cost averaging, which means we invest at specific times, regardless of market conditions. Regular amounts of money go every month into our retirement plans and our children's college funds. This way, we buy more shares when stock prices are low and fewer shares when prices are high.

It took me a few days, but that sick feeling in my stomach did subside. I'm still worried, but I'm not petrified because we've followed our financial planner's advice over the years. We regularly rebalance our portfolios. We have diversified our investment holdings.

It is in times like these that you have to keep in mind that investing means taking risks. In fact, I like the way Blandin views it. Think of investing as being on a merry-go-round, he says. There are still going to be some ups and downs. However, if you aim for steady growth by diversifying in stocks, bonds, cash and other types of assets, then it won't be a roller coaster ride.

"You don't have the deep highs and the deep lows," Blandin said. "But when you get off the merry-go-round, you aren't sick."

¿ On the air: Michelle Singletary discusses personal finance Tuesdays on NPR's "Day to Day" program and online athttp://www.npr.org.

¿ By mail: Readers can write to her at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071.

¿ By e-mail:singletarym@washpost.com.

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