Investors should embrace basic principles in turbulence times

— -- Sometimes it pays to get back to basics.

In Bailout: What the Rescue of Bear Stearns and The Credit Crisis Mean for Your Investments, USA TODAY investment columnist John Waggoner provides sensible, specific steps to help investors navigate through not just the rescue of Bear Stearns — which now seems like pocket change compared to the $700 billion Wall Street bailout — but the volatile financial markets likely to continue for the months ahead.

Waggoner begins by capably telling the story of what brought Bear Stearns down — not the stock market, but the bond market. And then he marches readers through how the mortgage mess unfolded and imploded, along with a dose of historical perspective.

But that's merely the launching pad for the gist of this personal finance primer. And the fact that the global economic underpinnings continue to quake in the days since Waggoner's book hit the presses makes it even more useful to investors who are running for cover.

Even investors who typically feel pretty confident about their money moves are shaky about what to do with their investments. But "if you do nothing with your money, you will lose it," Waggoner writes.

It's the Red Queen effect, named after the Red Queen in Alice in Wonderland, he explains. In the book, Alice and the Red Queen are running a race, but not moving.

"Well, in our country," says Alice, still panting a little, "you'd generally get to somewhere else —— if you run very fast for a long time, as we've been doing."

"A slow sort of country!" says the Queen. "Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!"

Waggoner's message: "If you want your savings to beat inflation, you have to stay invested just to make sure it maintains purchasing power. … So even if you're sure that the country is going to slide into the next Great Depression, you shouldn't be paralyzed by terror. You need to invest."