One couple's rationale for getting into the market

When the stock market started its downward spiral in 2008, John and Lori Chesser balked at risking any more money. Longtime active investors, they had dodged the dot-com bust of the early 2000s by avoiding Internet-related stocks altogether. "In 2008, everybody got killed," says Mr. Chesser.

So starting in November 2008, the Chessers – he's a technology consultant, she an attorney – stopped buying. They continued to contribute to their retirement account, Ms. Chesser's self-directed 401(k) plan at work. But until they could see a clear direction forward, they channeled their dollars to a money market fund.

"We took a vacation from buying anything" – or selling anything, says Mr. Chesser.

Many Americans took bolder action, quitting Wall Street altogether. In April 2007, 65 percent of Americans surveyed by Gallup reported that they owned stocks either individually or through a mutual fund, a near record high since the polling firm began asking the question in 1999. In April 2012, 53 percent said they owned stocks – a record low.

The Chessers, from Des Moines, Iowa, got back into the market in March 2010, a year into Wall Street's recovery, and with a more focused investment strategy.

Mr. Chesser, who does most of the research on stocks the couple buys, had long relied on Value Line, a respected investment strategy newsletter, for guidance on equity selections.

As stocks rose higher and higher, he flirted with broadening his research to include information gleaned from financial newspapers and magazines. That didn't serve him well when the market crashed, however. "It wasn't a disciplined approach," he says.

So now he has gone back to his Value Line principles, listening just to the professionals and ignoring the buzz in the financial press. The result: The couple's portfolio has climbed back to its pre-2008 level.

Mr. Chesser doesn't believe that investing information is much good for more than 12 months. So he isn't overly concerned about huge multiyear swings up or down in a stock.

"I am a time-limit person," he says. "I hold it for a year and it's gone."