By the time the trading ended March 2, the frightening stock market plunge earlier that week seemed like stale news. While the loss hadn’t been made up, the market’s meandering was a lot better than the string of plunges many investors had feared.

Still, the drop was a healthy reminder that investing is risky. And there are lots of signs that investors’ complacency is compounding risk today.

For starters, look at the causes of the worldwide plunge:

It began in China, where, analysts said, investors were worried the government might try to dampen speculation that has helped Chinese stocks double in price over the last year. Also, former Federal Reserve Chairman Alan Greenspan uttered the dreaded word recession, and there was a smidgen of negative economic news in the United States.

The pullback spread through Asia, Europe and the United States.

But the real cause, says Wharton finance professor Jeremy Siegel, was not those little triggering factors. It was that so many markets around the world had done so well for so long.

“There was some economic news,” he said in an interview, “but certainly nothing justifying a trillion-dollar loss in worldwide markets.

“China was the best-performing emerging market in 2006,” he added. “It has attracted a huge amount of speculators and a huge amount of trend followers.”

Many “trend followers,” or “momentum players,” pile into stocks that are going up, creating additional demand that drives prices even higher. Many use computer programs to automatically dump stocks when prices start to fall. That selling makes prices drop more.

In other words, the fact that stocks have gone up a lot increases the risk they’ll go down a lot.

Another danger is the low “risk premium” on certain investments. That’s the extra return one expects for shouldering bigger risks.

Early in the decade, risky junk bonds sold by companies paid nearly 12 percent a year, while safe U.S. Treasury bonds paid a little over 6 percent. Now that gap, or spread, is near an all-time low, with junk paying around 7 percent and Treasuries about 4.5 percent. Apparently, investors will settle for a lower premium because they’re not as worried that companies will default.

Until recently, investors also have ignored the risks in bonds backed by home mortgages. The appetite for these “collateralized mortgage obligations” made it possible for lenders to provide “subprime” mortgages to people who could not get regular mortgages because of low incomes or poor credit.

Now, growing numbers of these borrowers are falling behind on their payments, causing prices on these bonds to collapse. Investors didn’t take this risk seriously enough, and now they’re paying a price.

I don’t think stocks are set to implode. The S&P 500 stocks have been trading at prices about 17 times corporate earnings for the last 12 months, well below the risky levels seen in much of the last decade.

But the market’s jolt is a reminder that stocks can go down, and often do. You shouldn’t own them unless you plan to stick it out for at least five or 10 years – long enough to outlast the downturns.