If you can't stand the heat...

If you can't stand the heat...get out of the kitchen. This is a well known saying that bodes well for people investing in the stock market. Some people can't stand volatility. The ups and downs of the markets are frustrating to many people and cause them to worry and lose sleep. But volatility is not new. There have always been ups and downs in the markets and there always will be. One assumption people make is that the recovery from severe bear markets is too long. But they are not looking at the whole story. If you look at the stock market crash of 1929 as an example. Some might conclude that the Dow Jones did not recover and move on to new highs for over 15 years! But if you count reinvesting of dividends and capital gains, the recovery would have taken only 4 years! That's a big difference! Don't just look at the point to point moves on the charts. With dividends and capital gains, investors can make money in almost any market. This fact goes almost always unreported by most writers who are trying to make a case against stocks. So buy stocks and funds that pay dividends and be sure to reinvest those dividends. That's how you make money. If you want safety, buy CD's. If you want to invest, buy stocks. If you can't sleep at night, it might be time to reallocate your portfolio.