That refuge is my library of investing books. Last night, the respite came from William Bernstein’s The Four Pillars of Investing – specifically Chapter 6: ‘Bottoms: The Agony and the Opportunity.’ Referring to the vicious bear markets of 1932 and 1974, he writes:

“The rewards of fishing in such troubled waters are staggering. For the 20 years following the 1932 bottom, the market returned 15.4% annually, and for the 20 years following the 1974 bottom, 15.1% annually.”

How to handle the panic? Here’s Bernstein again:

“At a minimum, you should not panic and sell out – simply stand pat. You should have a firm asset allocation policy in place. What separates the professional from the amateur are two things: First, the knowledge that brutal bear markets are a fact of life and there is no way to avoid their effects. And second, when times get rough, the former stays the course; the latter abandons the blueprints, or, more often than not, has no blueprints at all.” 

Bernstein wrote his book in 2002, but I’m sure he would agree it’s quite the distinction for the Boomer generation to get caught up in two bubbles in quick succession:

“The Great Internet Bubble will not be the last the last of its kind. But if history is any guide, we should not see anything approaching it until the next generation of investors takes leave of their senses, sometimes around the year 2030. If the current generation gets caught out again, we should be very disappointed, as no previous generation has been so dense as to have been fooled twice. But then again, the Boomers have shown a singular talent for gullibility, and there is still plenty of time.”

The agreement sets out terms and conditions for the transaction to proceed while leaving a number of key issues subject to renegotiation. And it issues a warning to investors not to rely upon the document for investment purposes. As the first statement on the document, at the top of the first page, states, the agreement is:

“…not for purposes of disclosure to investors or any other purpose. The terms of this agreement may be varied or amended. Accordingly, investors and potential investors are cautioned that it would be inappropriate to rely on this document in making an investment decision…”

What particularly seems odd is further postponement of the deadline for completion of the transaction to December. Doesn't this suggest there are still some rather knotty issues to resolve — that it's not a “done deal”?

That’s not to necessarily say investors ought to buy mutual funds with high annual management expense ratios (MERs). An alternative is passive, indexing solutions like MoneySense’s Couch Potato approach.

Just spread your savings over several broad-based index funds and/or exchange-traded funds to set up a portfolio that is diversified over stocks, bonds, cash and other assets. The annual MERs are under 0.5% and the time or energy required is practically nothing. Yet, studies show your portfolio will do as well as or better than most people with financial advisers.

But then all those other personal-finance issues remain — like the best way to minimize taxes, save for retirement, arrange one’s estate, etc. They will require some time and effort to address properly. You can do it yourself, get advice from a knowledgeable friend/relative, or … hire a financial adviser.