Due to gremlins, last week's column contained a typo. It said, of a potential recession-induced slowdown in Bermuda: "It will mean that some construction plans will go up in smoke, but that would be a bad thing". What the column should have said, of course, is exactly the opposite: it wouldn't be a bad thing.

Some sort of a slowdown in the Bermuda economy would be a dramatically good thing. To all intents and purposes, the economy appears to be out of control. Annual inflation at 4.8 percent, GDP growing by more than 10 percent in 2006 (and probably again in 2007): this is not managed growth. Bermuda is subject to way too much construction right now, and it is one of the major factors overheating the economy and endangering jobs.

Not every empty space in Bermuda can magically become a five-star hotel or a four-bedroomed palace, at least not simultaneously. If the Planning Department were doing its job, and Special Development Orders didn't exist, Bermudians would stand a better chance of being in a position to get ahead of things, rather than vice versa. Luckily, not one of the grand hotel projects of which we have heard so much has reached the contractual stage. Of the developments that are actually going ahead, one or two are somewhere between a shame and a catastrophe. The conversion of Waterloo House to office space, for example, although necessary in the owners' minds, represents the end of a particularly Bermudian way of life. Civility was its hallmark, and time its currency. We have neither any more, which is worse than a shame; it robs Bermuda of what made it special.

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Quite a few people have asked what they should do about falling stock markets. My response is unequivocal: buy.

Indeed, I am about to put what little cash savings I have into the market, via a mutual fund. I don't expect this action will make me rich quick - regular readers will know that this column is not about that. But if the Dow Jones index stood at 14,000 a few weeks ago, and at this writing is around 12,600, prices of blue chip companies have fallen, on the average, by 10 percent. Prices of smaller companies, the "mid-caps", have fallen further still.

That means that the stocks I already own (whatever they may be; managers choose them for me) have probably come down by more than that, so buying stocks in a falling market might at first glance seem counter-intuitive.

The reason it isn't is what's called an "investment horizon". If I turned 65 tomorrow, buying stocks might not be such a good idea, because it might take a while for me to see profits. But, with luck, I have a few years before I'm 65, and so I will invest money I don't need between now and then in the hope of increasing the size of my retirement pie. The time between today and when I need the money is my investment horizon.

I'm not entirely a contrarian, but I do tend towards the view that if everyone is doing one thing, I ought to do the opposite. To paraphrase someone — and if I've said this before, I apologise, but I am rather taken with the notion — think how dumb the average person is, and then consider that half of everyone is dumber than that.

In fact, my investment plan is hardly contrarian at all. When prices fall, buying more stock is often a very good idea. Obviously, if you're invested in a company that keeps failing to meet its targets, or keeps making bad decisions, its stock price will have fallen with good cause. Those aren't stocks you'd want to own more of.

But when a whole market declines because of general economic circumstances, providing you don't think the end of the world is nigh, that's the time to "average down", i.e. reduce the average cost of your holdings by buying more stock more cheaply than the ones you already hold.

Here's an example, in case it's not clear. Say you buy 100 shares at $20 a pop, spending $2,000 in total. Then the price falls to $15. If you believe that one day, within your investment horizon, the price will come back, and you buy another 100 shares at $15, you would now own 200 shares for a total cost of $3,500. Per share, your average cost would be $17.50. If the price recovers to $20, you'd make a profit, whereas if you hadn't bought any more than the first 100, you wouldn't see any profit until the share price rose above $20.

The key is to believe in the stock. Its price may have fallen for perfectly good reasons, and you might be well off out of it, taking your loss and investing elsewhere. But the logic that underpinned your first purchase may remain valid, despite generally weakened markets.

How can you tell what's going on? Research. It may be dull, but money is earned, ultimately, for knowledge, whether it's knowledge about the price of shares, or about how plumbing works, or how to fly a plane, or whatever.

If you don't want to do research, or lack the time, hire a manager to do it for you. You'll have to research the manager, but, hey, money doesn't grow on trees. You're going to have to do some of the work.

A little humour to close with, on that very subject: A giant ship engine failed. The ship's owners hired one expert after another, but none of them could figure out how to fix the engine. Then they brought in an old man who had been fixing ships since he was a youngster. The man arrived, carrying a large bag of tools with him, and went straight to work. He inspected the engine very carefully, top to bottom. Two of the ship's owners were watching very carefully, hoping the man would know what to do. After looking things over, he reached into his bag and pulled out a small hammer. He gently tapped something. Instantly, the engine lurched into life. The old man put his hammer away. The engine was fixed! A week later, the owners received a bill from the old man for $15,000.

"What?" the owners exclaimed. "He hardly did anything!" So they wrote the old man a note, asking for an itemised bill.

The old man sent a bill that read: Tapping with a hammer: $2.

Knowing where to tap: $14,998.

The moral: effort is important, but knowing where to make the effort in life makes all the difference.