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Stock Analyst Update

The Dips Are Scary, but Dig in Your Heels

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It was another hair-raising day for investors Wednesday as stocks plunged on economic and earnings worries, but savvy shareholders should take such days in stride and stick with their long-term investing plan.

Technology stocks were hit particularly hard after stellar earnings from bellwether Cisco Systems  (CSCO) failed to ignite the stock, indicating that investors were more focused on the shares' rich valuation than the company's strong business. As a defensive measure, investors bid up stocks of household- and personal-product companies, whose goods are bought regardless of the state of the economy.

Laura Pavlenko Lutton does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.