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“It’s taken me all my life to learn what not to play.” -- Dizzy Gillespie, American Musician. 1917-1993.

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The topic for today’s article originally was “The Education Grandma.” The idea began with a group of Marco Maven’s who were enjoying lunch together. Not surprisingly, the topic of our discussion shifted to grandchildren.

A common desire to provide financial education for our prodigy was evident. Normally, this would be a great starting point for an article of tips for grandparents and there will be an article taking shape from this discussion, just not today.

As a financial advisor, I encourage people not to put their heads in the sand. So, if I indeed practice what I preach, the “Education Grandma” idea is taking a temporary back seat to current market activity.

To begin, let’s review the events of last week: Crude oil prices traded at a record high $90.02 a barrel Friday before falling back to close at $88.60 for the week – a gain of 6%.

The Dow Jones Industrial Average (an unmanaged index of 30 widely held securities) continued the roller-coaster ride that has been standard fare since it slipped past 14,000 exactly three months ago (on July 19), plunging 366.94 points to close at 13,522.02, a drop of 2.6% from the previous day’s close.

Weakness in the U.S. dollar led it to a new low against the Euro (now worth $1.42) on Friday as well, making up an unpleasant trifecta.

The Organization of the Petroleum Exporting Countries (OPEC) has expressed concern about the continuing run-up in oil prices, and there was talk of a meeting to discuss raising production yet again.

In the United States, crude inventories are at levels approximately 4% below those of last year. Analysts expect pump prices to rise in the next few weeks.

Nothing could stem market turmoil, which is being fed by continuing concern about credit, disappointing banking industry results and uncertainty over whether the Fed will cut the fed funds rate another 25 basis points when it meets on Oct. 31.

While Friday’s market slip wasn’t remotely comparable, it did not go unnoticed that Oct. 19 was the 20th anniversary of the 1987 market meltdown, when the Dow dropped 508 points and lost 22.6% of its value.

While some investors panicked at the time, observers point out that even with that dramatic one-day descent, by the end of the year the S&P 500 was up 2% and the economy kept chugging along over and through the rough spots inherent in the volatility that followed. From there, it was largely a positive market until the dot-com bubble burst in March 2000.

Time and technology change, but investors with a long-term focus learned an enduring lesson: panic doesn’t pay. Passive investors — or those who simply couldn’t sell because the technology was overwhelmed by volume — turned out to be winners in the long run.

As an “old-timer” in the securities industry, on Black Monday 1987 I was sitting in front of my computer terminal watching the stock market fall and have sat through many other market drops since.

The take-away, if you will, is that there is a difference between investing and trading. An investor is committed to a long-term process, adheres to an investment policy statement, employs a disciplined process, and utilizes asset and sector allocations to match risk tolerance.

Are your investments properly diversified and match your risk tolerance profile? Do they best fit in the category of investing for primarily capital preservation, primarily income, growth with income or primarily growth? How do you manage risk?

There is no substitute for a careful consideration of the variables of your unique personal circumstance. Before implementing any strategy contact and consult with a trusted financial advisor. Diversification does not ensure a profit or protect against a loss. Investments are subject to market risk, including possible loss of principal.

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Darcie Guerin is a financial adviser and branch manager at Raymond James & Associates Inc. at 606 Bald Eagle Drive, suite 401, Marco Island. Contact her at Darcie.Guerin@raymondjames.com, 389-1041 or toll-free (866) 343-0882.