Thank heaven for volatile markets. They teach newcomers, and remind not-so-new investors, that stock prices don't always go up. And believe it or not, that's a good thing.
If you looked at mutual-fund performance at the end of the first quarter 2000, you might have thought the bulls planned on staying in charge on Wall Street. But after weeks of market swings and big tech hits, the story's different: On March 31, the average stock fund was up more than 7 percent for the year, but by April 27, that gain had shrunk to 2.8 percent, according to fund analyst Lipper Inc.
Losing money is never fun, but it's the reality of investing in mutual funds.
Dian Vujovich is a nationally syndicated mutual-fund columnist and author of 101 Mutual Fund FAQs (Chandler House Press). For free educational mutual-fund information, visit her Web site, www.diansfundfreebies.com.