I got an email from a reader who had put a bunch of money into a mutual fund in September and then watched helplessly as the stock market ghouls of October did their dirty work.

“I have not been sleeping,” said the reader, whose email arrived on a gloomy Thursday morning, after a bloodbath in the stock market Wednesday. “Feeling guilty for chasing the market. Being one of those who felt ‘missing out.’ ”

(Note to readers, in all seriousness: If you are losing sleep over market swings, then you should probably not own stocks.)

“What shall I do?” she wrote. “Keep the money in? Or get out and wait for the market to settle down before going back in? I feel so stupid.”

Then came the kicker that allowed me to exhale: “I do have a 25-year horizon before I might need that money, just hate losing.”


I immediately emailed her back and advised her to listen to her financial adviser. (Or get one if she doesn’t have one.)

I’m sorry for her distress, but her note gives me a chance to talk about one of my favorite topics as an investor: how I’ve learned to love a big downturn.

You see, corrections aren’t all bad. In fact, if you don’t need the money any time soon, you should love your corrections.

“Corrections can be very healthy,” said Jeremy Siegel, professor of finance at the Wharton School of the University of Pennsylvania.

Market declines create opportunities. If the reader has her money in reputable, diversified, low-fee mutual funds that are invested in big, U.S.-based companies, history suggests she will be fine.

Just leave it there.

Money minds, from billionaire Warren Buffett on down, warn retail investors like you and me not to jump in and out of the market, trying to time when stocks go up and go down.

It’s called market timing. And I don’t play it. I am not a gambler.

Geniuses who pick stocks for a living even have difficulty pulling it off.

Take Margaret Vitrano, a portfolio manager at ClearBridge Investments. Vitrano bought Alibaba after a sell-off in Chinese technology stocks and has kept adding to it and other stocks during the current volatility.

“We can use volatility to our advantage, as it provides opportunities to purchase quality growth companies at attractive prices,” Vitrano said.

I have been through market ups and downs. The first couple, I panicked. Then I learned to ignore the stock pages and just adhere to a routine schedule of buying mutual funds.

When it comes to stocks, time is your friend.

If you are retired or close to it, you should have already diversified into some cash and fixed income to avoid the market swings.

If not, this week was probably a real downer. Forget this year’s safari. Cancel the booking at the Relais & Chateaux. Put off buying that bottle of Château d’Yquem.

“However,” said Chris Brightman, chief investment officer of Research Affiliates, “if you are a young person who is just beginning to save for your retirement, the volatility in today’s stock prices has very little impact on the ultimate value of those companies.

“Declines in stock prices are your friend, because you can buy more stocks,” Brightman said.

This week, I wanted to scream, “STOCKS ON SALE.”

Take Netflix, which was blistered in the downdraft.

Netflix sold for $381 per share Oct. 1. The price was $300 after Wednesday’s sell-off. Think of it this way: That’s more than a 20 percent savings.

The technology-laden Nasdaq — on pace for its worst month in a decade — is more than 10 percent off its all-time highs. If the price of milk or a car or an Apple iPad dropped 10 percent, would you sneer? Or would you run out and buy it?

“Stocks have become cheaper,” said Michael Geraghty, equity strategist at Cornerstone Capital Group. “They are not bargain-basement cheap, but they are certainly cheaper than a couple of weeks ago.”

My favorite thing about stocks? Many pay you money while you own them. That’s called a dividend. So not only are you getting stocks cheaper by buying them on sale, you are buying their dividend at a cheaper price, too.

Let me give you a concrete example: I own a couple of utility stocks. They pay nice dividends. Not set-for-life money, but I do get some cash four times a year for each share I own.

It’s only a couple of bucks on each share, but it adds up. I don’t spend that money. I buy more of the same company shares with it, which happens automatically through a “dividend reinvestment plan.”

Siegel wrote an entire book on the efficacy of dividend reinvestment called “The Future for Investors.”

“It’s important to have a dividend reinvestment plan, especially during the [stock’s] down years,” he said during a phone interview Thursday. “You keep reinvesting dividends, and you scoop up those shares. When the eventual recovery comes, you end up better off.”

The nice thing about this is that when the stock’s share prices drops, the dividend DOES NOT DROP.

ExxonMobil’s $3.28 annual dividend looked a lot richer if you bought an ExxonMobil share for $77.62 on Thursday morning. That’s because the oil giant stock had dropped $2.22 a share in Wednesday’s bloodbath. The dividend never changed, though.

So when stocks drop, it doesn’t break my heart. Unless the company is going to fail, and there are usually plenty of signs beforehand, stock prices almost always recover.

You can sit on low-priced stocks for years, plowing dividends back into buying more shares. Then something hits — a new product, better management, an economic boom — and the stock takes off. It did with Apple. It did with Microsoft. Disney. McDonald’s. Boeing. I could go on.

There’s another silver lining to downturns. Corrections can weed out investors like hedge funds who are not in for the long term.

“There’s been a lot of trend followers, momentum players” in the current bull market, Siegel said. “I don’t think that’s healthy for the market. It’s good they get shaken off now and then. Corrections can be very healthy toward getting people back to realistic looks at earnings.”

Let’s call it a reality check.

The surest way to predict future stock prices is to be a time traveler. If you don’t have a time machine, it’d be extremely difficult to know what’s ahead. (If you have a time machine, please call me immediately!)

The higher stock prices become, the more volatile they can get. The price of a stock, after all, is based on what the buyer thinks the earnings will be in the future. Sometimes those expectations are unrealistic. That might result in rapid buying and selling. Stock prices can become fragile or volatile.

“It’s very easy to get caught up in emotions on a day-to-day basis and in near-term issues,” Geraghty said, whether that’s concerns about tariffs, China-U.S. relations or midterm elections.

Geraghty sees this week’s plunge as just such a reality check. Companies cannot keep increasing their earnings at 20 percent a year as they have recently. Think 5 or 10 percent instead.

The bottom line, Geraghty said: “If you keep a 12-month horizon, we believe investors have a way to stay grounded in their expectations for equities.”

And if you have a 25-year horizon, like the reader who emailed me, you should sleep well at night.