Nervous when the market drops 200+ points?

Are you asking: " Why didn't I sell yesterday?"

Are you saying: 'I'm going to sell tomorrow!"

Then you probably speculating, not investing.

Speculators buy or own stocks they think, or should I say, hope will go up. When they don't, they question their decision to buy or own them.

Investors buy stocks because they are a good value. Based on a company's current and future earnings, investors conservatively estimate the company's intrinsic value to determine if the stock is priced appropriately.

Most stocks are priced appropriately most of the time. But momentum results in stocks, or the market, reaching levels of over- or under-valuation.

When the market becomes over-valued, speculators jump in "not wanting to miss the money making opportunities." When the market reverses and becomes under-valued, speculators sell fearing a loss of their investments.

The stock market provides the investor with the opportunity to take advantage of fear by buying at cheap prices, or greed by selling at high prices.

I like the way Warren Buffett puts it: "it's only when the tide goes out that you can tell who is swimming naked."