I actually did take a small position in the market yesterday. Since 2003, I have converted almost all my non-real-estate assests to index fund investment. So far, my "loss" compared to the 2007 peak is about 5-10%, with compounded interests considered. And as a cushion, 15%-20% of assets (besides emergency money) is always in cash and short bonds. I briefly discussed this in one of my previous articles.
Indeed, I shall sleep sound even if the market goes down for another 5-10%.
You are really "dan din" - wonderful attitude! But I guess such sudden change at such a fragile moment is still significant - whether it's caused by a errorneous trade transaction or something else, it reflects the fragile mind of the market and the people in it. Of course, from long-term perspective, it's a good opportunity to buy dip - if you haven't lost too much yet:).
The market has been up for 14 months and people are looking for an excuse to pull the trigger.A correction of 5 to 10% is bound to happen. Long-term investors shouldn’t be nervous --- it might be a good opportunity to add more.
BTW, percentagewise, today's drop is nothing. On Black Monday (October 19, 1987), the Dow dropped by 508 points to 1738.74, or 22.61%.
Now they are saying that it's likely to be caused by an "erroneous trade" entered by someone in a major trading company - like someone entered "billions" of shares (either buy or sell) instead of "millions" as it's supposed to be. In any event, it is a scary day for the traders and speculators alike:).
