What August's Stock Decline Should've Taught You

The stock market's late summer decline provided a lesson that shouldn't be ignored. Six years of rising prices caused many investors to forget the volatility that accompanies equity investing — until the S&P 500 Index declined 11% in seven trading days late in August to a level 12% below this year's high. This, along with the relentless negativity of the financial media, frightened investors into making $30 billion of net redemptions from stock mutual funds.