It’s an amazing fact: About one-half of all households today own equities, compared to one-third a decade ago. Millions of workers and professionals invest in stocks for their retirement, for their children's college education, and, of course, for the chance to strike it rich. Millions more own stock options or participate in employee stock ownership plans.

Many Wall Street money mavens have long feared the rise of America’s nouveau investor class. The worry has been that individual investors would flee when the bull market ended and the era of double-digit gains turned negative. The mass retreat would devastate the stock market, perhaps even leading to another Great Depression. The case for alarm was compelling, considering the rise of day trading, silly dot-com valuations, and the blissful enthusiasms for high-tech stocks.

Well, the gloomy thesis got a real-world test starting in early 2000. The dot-com bubble burst and high-tech stocks cratered. The stock market plunged into a bear market, and some $4 trillion in equity wealth vaporized. Equities dropped farther in a week after the terrorist attack in September than at any time since the Great Depression. Investors have endured two straight years of losses in 2000 and 2001—the first back-to-back downturn since the early '70s.

So what did individual investors do? For one thing, they didn’t panic. For another, they hiked their equity mutual fund holdings by nearly $30 billion during the first eleven months of 2001. Are investors crazy? Hardly. Most individuals participate in the stock market through a retirement savings plan, such as a 401(k). They’ve learned that equities should form the core of any long-term investment portfolio.

Indeed, despite the "you too can be a billionaire" ads memorably aired by Internet brokers in the '90s, only a minority of individuals actively traded stocks and borrowed on margin. The rest of us plodded away, putting a little bit into the stock market and the bond market with every paycheck. Sometimes, slow and steady does win the race.