If you’re saving for retirement, you’ve probably lost significant value in your accounts in 2022. As of 5/24/22, CNN Business shows that year to date losses for the Dow are over 12%, losses for the S&P 500 are more than 17%, and the NASDAQ is approaching 30% losses for the year. If we’re not in a bear market now, we’re really close. And bonds have lost money as well. Cryptocurrencies have also fallen with BitCoin down over 35% YTD. Unless you were in cash, there were few places to hide. And the daily volatility of this market is enough to make you feel seasick.

So, what do you do now? Without a crystal ball, I can’t share the perfect way to make money in this painful market. These types of corrections (and this is a big one) are common and we experienced them on a regular basis as recently as 2000-2002, 2007-2009, 2011, 2018, and March 2020. If you held steady through all of them, you would have done just fine due to the bull markets that followed each of them. So here is what I do and don’t do in these painful markets:

DO stick with your plan. Make sure your asset allocation still makes sense for you. This is your mix of stocks, bonds, and cash. If the values have changed significantly, you may need to rebalance your investments to align with your plan. Keep a long-term perspective. Stay diversified. DON’T try to time the market right now. It’s a fool’s game and it seems only a lucky few have done it. It’s almost impossible to do over the long term because you need to time when to leave the market and time when you should get back in it.

DO increase your savings right now. If you have a 401(k) or IRA that you systematically invest in, crank up your investments. Even 1% or 2% more will make a difference. DON’T think you should pause your investing now while the market calms down. Remember, if you thought it was a good idea to invest six months ago, it’s even a better time now that prices are lower.

DO take care of yourself now. Eat well, exercise, read, spend time outside, and find new ways to relax. DON’T obsess on this market. Don’t look at your accounts every day(or several times a day), tune out the financial media, and remember that this isn’t the last bear market you will face. There will be more. But the bull markets that are in between make it all worthwhile for the long-term investor.

DO other financial activities that will benefit you such as paying off debt, updating your will, or investing in yourself (learn a new skill or get a new certification). DON’T think life has materially changed as this is simply a short-term market downturn and history shows it will eventually recover. Your life is not defined by your investment portfolio.

I certainly do not claim these Do’s and Don’ts to be the right thing for everybody to do. This is how I have approached investing over my lifetime. And it’s worked well for me. Feel free to contact me for help in building a retirement plan for you or to review the plan you already have in place.

Enjoy the Journey!