But stock market volatility such as this could signal that a recovery may not be too far off.

Stock market volatility, as measured by the Volatility Index, also called the "investor fear gauge," is a measure of market risk and uncertainty. It hit an all-time high on Monday of 52.05, surpassing even the levels experienced during the crash of 1987, the terrorist attacks of Sept. 11, 2001, and the dot-com and technology bust of 2000.

Historically, a high reading in the Volatility Index preceded a rebound and generally signaled it was a good time for investors to step in back into the market, said Sterling Jenson, of Wells Fargo Capital Management in Salt Lake City.

Mark Skousen, a Brigham Young University graduate, financial writer and economist who edits the monthly Forecasts & Strategies newsletter, agrees.

"When the volatility subsides and the market stabilizes, there will be some bargains out there. What we saw Monday was a classic panic followed by a partial recovery."

Monday's gyrations suggest there were some in the trading session's final hours who snapped up bargains. But for now, investors with faith are vastly outnumbered by those who are worried about the future of stocks.

Phillip Collett, of Draper, a 22-year-old working in information technology support, said Monday's events shook his belief in the ability of stocks to help him meet retirement goals.

"It worries me. I would lean a lot on stocks for retirement, but I wouldn't put all my eggs in one basket."

But if the Volatility Index suggests we're entering a time when it may make sense to buy, who should jump in? It depends on how much you can stomach. Although the index signals the market may be nearing a bottom, markets never have smooth trends up or down.

"We've seen a big earthquake, but we're probably going to go through some aftershocks before we're done," Skousen said. "For many investors, it probably isn't a bad time for them to begin building up a cash position to take advantage of the market when it finally begins to turn around."

There is some hope in what happened Monday. The market started falling first thing in the morning, and by afternoon the Dow was off 800 points - an intraday record. But in the last hour and a half, the market jumped, preventing it from closing so low that investors would have been spooked even more.

Many local investors certainly were worried.

Bev Taylor, a nurse living in West Valley City, said she's fairly disenchanted with stocks, which make up only about 10 percent of her portfolio.

She has the luxury of time - stocks will be the last part of her portfolio she cashes out. "I haven't even looked at my stocks, because I know that sooner or later there's going to be a turnaround."

Sandy financial planner Neil Mahoney said there are important lessons to be learned from the volatility of recent weeks.

One is that huge fluctuations are a certainty. "We work really hard to educate our clients that investing in the stock market is a long-term proposition and that volatility is to be expected. There have been pretty significant dips, but each one has been followed by comebacks."

Mahoney said another lesson is investors should have a properly diversified portfolio that gets more conservative as retirement draws near. Another? That money needed within three years should not be in the stock market.

And one more thing. "Acting out of panic or fear is not the best way to act," Mahoney said. "We don't know how long this is going to take, but we'll survive this."

steve@sltrib.comlesley@sltrib.com