I’m sitting in a restaurant for lunch and two people at the table next to me start talking about investing and their 401ks. True story.

I’m not good with ages but they were 30ish give or take. Their firm just stopped the company match on their 401ks. Here’s the short version of their discussion:

• Company stopped the matching contributions.
• Their account values are down and they can’t get ahead.
• They are tired of the up and down turns in the markets.
• The economy is in the dumper.
• They would rather put their money somewhere with consistent growth.
• Maybe they should pull their money out of the 401k and use CDs.

As much as I was moved to say something to them, I didn’t. I have no problem minding my own business…really! Besides, to properly address all their issues would have taken the whole lunch time and more.

What eventually struck me was that for their age, they have only known the flat market we’ve been in since March 2000. Check out a stock chart using the DOW Index from Jan 2000 to now. Notice how we have hovered above and below the 11,000 level. No wonder their opinion of investing was sour. The younger investors of today need some perspective.

The flat market over the last dozen years is normal. Flat markets happen; now, 1966-1982, 1946-1950, 1905-1917 and so forth. The flat markets happen after periods of strong growth and they tend to last a while as you see. They provide an opportunity for the economy to cool off, retool and resynchronize as we, the country and world, prepare for the next round of growth. Unfortunately to someone who’s only investment experience is during a flat market, the investment world is flat. Have no fear younger investors, the world is not flat.

Our human brains focus best in today’s world. What’s going on today forms our opinions and how behave with our money. At the end of every day, we are told the DOW is up or down. The evening news talking heads always spin the down days as though we all lost our shirts. On the good days, we’re rich! Then we take action based on information from this very limited perspective–action doomed to fail.

Investors must use a long term strategy. In the short term, the markets are up and down and random. Only speculators try to make money in the volatility of the short term markets. True investors see a bigger picture. The stock market is up 72% of the time over the long haul. Looking at it this way, realize that down markets are temporary and must be exploited before the inevitable climb upward starts again.