Gut Check Time: Do you have what it takes?

So far 2008 has been a real test to see

• Who really believes in investing for the long term
• What your risk tolerance really is
• If you are diversified and trust your asset allocation

Listening to the weekend talk shows and talk around the office, all I hear are people questioning whether they should sell their stocks. However, selling now would be the opposite of what should be done. The time to sell was when you were at record highs, not now that they've pulled back 15%. If you still believe you are investing for the long term and you have a good diversified allocation, then this is the time to buy those beaten down stocks. We may still see some losses ahead, but since it is just as hard to predict a bottom as it is a top, this is a good time to start loading up again.

The only question in my mind is on the commodities front. Gold and oil are at all time highs. Corn is also close to 52 week highs. I have no doubt that oil will continue to do well, but I am not sure how much higher gold and corn will go. So if you have already made gains in these areas, it is time to rebalance your portfolio, if you haven't already.

Corrections like we are currently seeing cleanse the market of inflated prices and nervous investors. This generally keeps the markets healthy over the long term. Kind of like a controlled fire clearing the dead wood from a forest and being beneficial in the long run.

So I will continue to invest twice a month and maintain the faith in my asset allocation.