I Feel Like I Win When I Lose

Is it possible to remain serene during a market slide? A down market is just a normal occurrence. If you are reasonably diversified then hopefully some of your allocations increase in value and offset some of the losses in the allocations that are highly correlated to the broad market. The down market also presents significant opportunities to make long term purchases.

On the other hand, there is always the chance that this is the 'Big One'. In order to avoid a Waterloo situation, should you incorporate some hedging into your long term plan? Using a simple timing model to change your allocations can be advantageous. Or perhaps your current positions should be maintained and you should make an allocation to short positions at some point?