Sell-offs offer the chance to buy stocks on sale

• Markets go up and they go down. But over the very long-term%2C stocks produce an average annual return of about 9 percent.
• Consider negative markets as an opportunity to buy great companies at discount prices.
• Buy industry and brand leaders at attractive valuations%2C and diversify holdings across industries and economic sectors.

Stock market sell-offs substantiate the reason many of us don't invest.

If you are like most women, last week's volatile (and mostly down) stock market simply reinforced what you already believe: the stock market is a game of chance. I won't argue that buying stocks isn't trying from time to time. Even after the most thorough research, stocks can negatively surprise us. But I also know what the facts tell me. Over the very long-term, including all the unpleasant downturns, stocks produce an average annual return of about 9 percent.

Knowing that provides the perspective needed in order to stay the course and increase our wealth. It also allows us to view a market sell-off for what it is: more like a clearance sale than a going-out of business sale.

Last week was a perfect example of investing in real time. Markets go up and they go down. They are dynamic and kinetic, which is why we must employ a sound investment discipline and stick with it in good times and bad. Consistent implementation generates strong cumulative returns.

Consider negative markets as an opportunity to buy great companies at discount prices.

Though buying stocks when others are selling is extraordinarily difficult to do, it is the best way to make money over time. Tune out the media pundits and the financial experts who need to fill a 24-hour news cycle and consequently direct a laser-beam focus on short-term events.

Our focus is on meeting our future financial objectives, such as funding our children's college education or accumulating enough wealth to retire comfortably. Investing requires at least a 3-5 year time horizon. Ten to 20 years is even better. Stocks need time for earnings and dividends to grow, which causes the price of the stock to appreciate. So, when sell-offs come along (and they will — think pruning our garden to stimulate new growth), we should be prepared to take advantage and add to our holdings.

Here are three rules for purchasing stocks to own for a lifetime: buy the industry and brand leaders; buy these companies at attractive valuations; and diversify holdings across various industries and economic sectors.

These rules should form the foundation of our investing discipline. For the next few weeks we'll explore the how and why of owning industry leaders. Your homework until then is to compile a list of companies who provide the products and services you use and value most. Rank them in order of importance to your household. We'll take it from there next week.

Nancy Tengler spent two decades as a professional investor. An author, financial news commentator and university professor, her book "The Women's Guide to Successful Investing" will be released by Palgrave Macmillan in August. Contact her at nancy.tengler@cox.net.