Market meltdowns, like the one we saw last week, and the one that may be forthcoming this week (as of this morning, the Asian markets took another nosedive), are no reason to panic.

In fact, unless you are on the cusp of retirement (or currently retired), market corrections are mostly positive news. Corporate profits are at multi-year highs. U.S. corporations have as more cash on hand than at any time in history. Because of the first two reasons, dividends and buybacks are also on the rise. The correction allows you to buy these assets and cash flows for that much less.

Whether you invest responsibly or not, most individuals need to keep these four principles in mind:

• Be diversified. Unless you have a few million and do not need to work, you should not be concentrated in any one company or asset class. Even if you are getting generous options grants from your employer, you should periodically diversify to protect your downside. Proper allocation is where a good financial adviser can really earn his or her pay, because arriving at such an allocation requires taking into account your life stage, your goals, your current assets, your income, and a lot of other factors.
• Be low cost. The average actively managed mutual fund charges an astounding 1.57 percent of assets each year. If you figure that stock returns historically average 8 - 12 percent, that is a lot of money for no risk. Still, that figure would be fine if they consistently outperformed the market benchmarks. Alas, they do not. While about 40 percent of actively managed funds beat their benchmark in any one year, less than 15 percent beat the benchmarks over 5 years. If you consider that index funds charge 60 to 90 percent less than 1.57 percent, you might as well be content with market returns.
• Maximize your company's 401k plan. Nowhere else can you get a tax deduction, tax deferral, and free money in the form of a company match. Think about it. A company match means that you get a 100 percent return automatically. No investment vehicle in the world can offer that kind of return without risk. Even if your company does not have a match, the tax deduction can enhance your dollars by 15 to 35 percent. Still pretty good.
• Be systematic. Whether you resolve to invest once a week, once a month, once a quarter, or whatever, be disciplined about saving a set amount. This is yet another reason to utilize your 401k plan, because money will be taken out of your paycheck every time you get paid, and you will not even miss it. Systematic savings plans also allow you to take advantage of lower prices when the market corrects.

If you follow the above principles, then most of you will do just fine. Concentrate on making money through your employment or entrepreneurial endeavors. The more one obsesses over making money in the market, the more likely they are to start market timing, and believe me, almost everyone who tries to beat the market with timing fails. Even the professionals.

You might be wondering which, if any, vehicle accomplishes this task. My favorite mutual fund is the Vanguard FTSE Social Index Fund (VFTSX). Based on the FTSE4Good Index Series, it focuses on environmental sustainability, human rights, and corporate governance. The management fee, at 25 basis points (versus the aforementioned 157 basis points for actively managed brethren), is the lowest among all SRI funds. Versus non-screened indexes such as Vanguard's S&P 500 Index Fund, this fund is a little more heavily weighted towards technology and healthcare companies, but not so much that it would wreck a sound asset allocation.