You have a plan to retire in 27 years. Before last month, you owed $200, 000 in an S&P 500 index fund. The stock market has dropped 20% in the last month so now your $200,000 has lost $40,000 in value. Ouch! Based on what you learned in this chapter, what should you do?

Which are priorities for basic investing?

Which type of investments typically has the lowest rate of return and the lowest risk?

Which type of investments typically has a modest rate of return?

Which type of investments typically has the highest rate of return and the highest risk?