A year ago today...
Adapted from the Sept. 15 Editors' Weblog: A year ago today... 
. We've just passed the unhappy anniversary of the mid-September '08 slide into financial panic. Although things were already rocky heading into last September (subprime debt defaults, falling housing prices), when the government allowed Lehman Brothers to go bankrupt, a full-fledged panic ensued. Over the next few days, AIG was taken over by Uncle Sam, Merrill Lynch was forcibly folded into Bank of America, and a money fund broke the buck, starting an electronic, but very real, run on the banking system.
There is no shortage of lessons to glean from the events of the past year, but one stands out: the importance of investing with a long-term plan in mind. If ever a convincing case could have been made for ditching one's long-term plan and reacting in the face of seemingly game-changing events, it would have been during this past year! Staying the course seemed like the worst possible option.
But even in the darkest days for investors (remember January and February?), we kept reminding readers that the key question wasn't, "Where will stock prices be in a month?," but "Where will they be in five to ten years?"
Even though the market is still off by double digits from a year ago, the rally that began in March has made the losses of 2008 and early 2009 no longer seem insurmountable. Better still, SMI Upgraders who held firm are actually back to "mild loss" levels—less than 8% (based on SMIFX returns as of 9/14/09; SMIFX can serve as a useful proxy for the performance of SMI's Upgrading strategy ). An investor who didn't know about all the volatility along the way probably wouldn't blink an eye over a loss of less than 8% over a 12-month period.
And that's exactly the point. Losses such as we saw last winter can materialize faster and cut deeper than anyone expects. And rallies — like we've experienced over the past six months — can do the same in the opposite direction.
Yes, it's been an extremely wild ride — enough to reveal to some investors that they really can't stomach the level of stock market exposure they had previously planned on. Indeed, that is a lesson some people should take away from the Financial Panic of '08-'09.
But the larger lesson is this: in times of panic, a long-term plan — and outlook — is invaluable. 
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