Swearing Off Market Volatility

Updated from 7:04 a.m. EST

The stock market's big up-and-down swings of late might have daytraders and professional investors buzzing. For the majority of investors, however, the recent gyrations should be viewed simply as noise, with little bearing on a longer-term allocation strategy.

Consider a recent period, in which the Dow Jones Industrial Average rose or fell by more than 80 points five times in eight sessions, just to end up about 30 points higher than where it started. Professional traders love this kind of market because it plays into strategies that profit from volatility itself.

The average investor should pay far less attention, financial advisers say. Neither the market correction, which took the Nasdaq Composite, the S&P 500, Dow Industrials and most other indices down for the year, nor the recent rally should profoundly alter your asset-allocation strategy. It's far wiser to stay steady and follow the consensus of market strategists, who may quibble about sectors but generally agree that the right mix of stocks, bonds and cash depends much more on an investor's age than what the market is doing at the moment. ...