1 percent for the year while the nastifying Nasdaq had fallen 17 percent. But last week, the Dow and Nasdaq dropped about 8 percent each and finished well below the psychological barriers of 10,000 and 2000.

Credit–or blame–unremitting bad news: corporate layoffs, reduced earnings forecasts, crummy economic stats, the prospect of higher oil prices, the likely bankruptcy of two big California utilities, the chances of big loan losses at financial institutions. And there’s Japan, which has been in recession for a decade. Mooooo! Make that double mooooo!

What’s especially notable is that all this plunging and twitching and glooming and dooming took place despite the supposedly imminent interest-rate cut this week from the Federal Reserve Board. Is Alan Greenspan’s market magic wearing out? Or would last week’s stampede out of stocks been worse had Uncle Alan not tipped us about the upcoming cut? How far can Mad Dow spread? Who knows?

OK. Now that we’ve recited one week’s litany of woes, it’s time to take a deep breath and try to gain some perspective. The conventional wisdom these days, of course, is that owning stocks is incredibly risky. That the worst is yet to come. This CW is not to be confused with the CW a year ago: that you were a fool not to have every dollar you owned in stocks, especially technology stocks. The economy would grow forever, and we’d all be rich. But this year’s CW is as foolish as last year’s was. Maybe even more so.

Here’s why. Sure, in the short run the market is looking grim, not to say bleak. There are shoes yet to drop in technology, and loan losses yet to pop up in banks’ income statements. And as someone who’s read financial histories, I’m worried about what I don’t know. About an overnight collapse of some kind–remember Asia, Russia and Long Term Capital Management?–setting off a worldwide financial panic.

But the long-run investment picture–I’m talking five, 10, 15 years–is far better now than it was a year ago. That’s because so many stocks are so much cheaper. The Nasdaq has more upside and less downside at 1900 than it did at 5000. (It can’t fall another 3,100 points, because it can’t go below zero.) Cisco Systems is a much better bet at 20 than it was at its high of 82. Oracle is a better bet at 14 than at 46. And so on.

I’m not recommending that you put money in Nasdaq, Cisco or Oracle–telling you when or what to buy or sell would be the height of journalistic arrogance. I’m just trying to show you how smart investors think. Witness the well-respected Steve Leuthold, a Minneapolis strategist who warned for years against market excesses, but now reminds us that stocks tend to bottom well before the economy does, and that it may be time to do some discreet nibbling.

Before the memory of this dreadful market fades–and it will–it’s time to remind ourselves once again that stocks don’t offer a free ride. Up until a year ago we’d had an almost continuous bull market since 1982, with a record five straight double-digit returns from 1995 to 1999. So the idea spread in the land that stocks were a miracle cure. People aren’t saving enough for retirement? Let them buy stocks. Budget deficits? Taxes on stock profits put federal and state budgets into surplus. The hot market let companies pay employees with stock options instead of cash. Individual stock accounts are a perfect way to deal with the looming shortfalls in Social Security without raising taxes or cutting benefits’ growth. These ideas don’t look too good now. Repeat after me: the stock market is not a panacea. It doesn’t guarantee us anything.

Today’s situation is the obverse of a few years ago, when grizzled financial types like me told you that stocks would fall, possibly quite sharply, someday for some reason. And someday, I don’t know when, stocks will stabilize and start heading up again. Down markets are an expected part of life. At least, they were expected before we had five years of the All Boom All the Time crowd shilling for stocks on TV and radio and in newspapers and magazines. Now, they’re All Doom All the Time. Tune them out.

To return to the bovine motif, there’s only one sure cure for Mad Dow disease: for us media-elite types to declare the bull market dead, for now and for all time. Sorry, I’m not doing that today. I’m afraid of yet another malady: foot-in-mouth disease.