Bob Colton, a marketing director from Jacksonville, concedes he may have grown a bit cocky about the stock market, ignoring the possibility that the extraordinary runup in share prices could someday hit a huge wall.
"I don't know if I was being too complacent or too greedy," said Colton, 47, who had shifted a large portion of his $220,000 investment portfolio, earmarked for college and retirement, into stocks during the seven-year bull market.
"I knew there was going to be a correction somewhere along the lines. I guess I didn't think it would be now."
The market meltdown _ which culminated Monday in a 554-point plunge in the Dow Jones Industrial Average, or a 7 percent drop in value _ caught many other small investors off guard. Most, like Colton, have grown to depend on higher share prices to help pay for long-range goals, like retirement, college or home buying.
Although the market came back strongly Tuesday, investors remain nervous about the market volatility. However, interviews with individuals and financial professionals nationwide show most people still think stocks and stock mutual funds are the best investment vehicles around. Many have no immediate plans to bail out.
An ABC News Nightline poll conducted hours after Monday's sell-off found that only 1 percent of stockholders interviewed were thinking about selling; 80 percent intended to stand pat.
Alison Saunders, a vice president at Cigna Retirement and Investment Service in Hartford, Conn., said she noticed only a few major changes in investment strategy as well. About 60 percent of the 1-million participants in the 401(k) retirement plans Cigna manages shifted out of equity funds and into fixed-income funds made up mostly of bonds, but at the same time, 40 percent moved into equities, she said.
Several mutual fund companies said phone inquiries were up. But they said the flow of money from one type of fund to another didn't follow any unusual patterns.
"I'm not selling anything right now _ in fact, I'm looking to eventually buy," said Peggy Schmeltz, 70, of Bowling Green, Ohio.
Schmeltz, an avid investor with a stock portfolio well into six figures, says she saw the Oct. 19, 1987, crash, in which the Dow plunged 508 points, or 22.6 percent in value, as a buying opportunity. Most of the losses she had suffered turned out to be short-lived.
"The week of the crash I really went in and bought. Some of the stocks dropped one-half of their value. Six months later they recovered where they were before."
Although the market has bounced back from Monday's meltdown, financial experts were urging small investors to refrain from any major moves in or out of the market right now.
The Dow may be down more than 9 percent from its Aug. 6 peak of 8,259.31, but it still is up more than 16 percent from the end of last year.
"The way I look at it: It's too late to sell, but it's still too early to buy," said Hank Madden, who runs Madden and Associates Financial Consultants in Jacksonville and has counseled Colton and his wife, Barbara, a 47-year-old schoolteacher.
Most economists and market watchers categorized this week's market rout as a knee-jerk reaction to recent turmoil in the Asian markets, including Hong Kong, whose main stock index has plunged 45 percent from its Aug. 7 peak.
Economists expressed confidence the U.S. market would recover, largely because the economy and fundamental health of many companies remains strong. However, some said the market could dip further in the weeks ahead before fully stabilizing.
"We have the best functioning economy in the world," said Robert Brusca, chief financial economist Nikko Securities Co. International. "We look good in relative terms."
Nonetheless, Brusca said he considers no stock market a safe-haven for investments right now, noting that U.S. investors had been "over-allocated in stocks" in recent years.