The S&P 500 is a rock!  After all that transpired on Wall Street this week, the S&P 500 only changed 3 points in 1 weeks time.

Just 3 tiny little points on the upside.

With all the drama, the bankruptcies, the bailouts, and of course, the realistic possibility the U.S. economy could have fallen even further into a downward spiral, it’s mind blowing to contemplate the minuscule change in the S&P 500 once the final numbers were tallied.

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Last Friday (Sept 12, 2008), the S&P 500 index closed at 1252.  This Friday (Sept 19, 2008), after everything that happened, it closed at 1255.  Simply amazing.

Just one more reason that you should ignore the daily financial news.

Why should you be impressed?

For those who invest in index funds, and somehow managed to avoid every single news media outlet the entire week, it’s entirely possible you would be clueless to what transpired if you only checked the balance on your index fund account.

I haven’t changed my opinion that index funds being bad investments because of their poor performance over the last decade, but after seeing this weeks action, I’m certainly impressed with their resiliency in a difficult market.

How to take advantage of these volatile markets?

Wise investors, who truly know how the investing game is played, take advantage of fire sale prices when given the opportunity.

One such example was from Clever Dude, who recently announced he made a $1500 contribution to his Roth IRA because the market was selling at such low levels.  That’s the way it’s done!

I myself made a Roth IRA contribution recently (like I do every September) into the Vanguard REIT Index Fund.  Instead of betting on the broad markets like the S&P 500 index, I’m making a more concentrated bet that the real estate market will improve by purchasing REITs, or Real Estate Investment Trusts.

What about you?  Did you decide to jump in and buy on the dip in the market this week, or did you decide to wait for a stronger sign the market will improve?

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Questions / Comments / Concerns ?