Fluctuations in your 401(k) or workplace retirement savings account can stir up negative emotions, making you want to hit the panic button. But in turbulent times, it's more important than ever to remain calm and stay on course toward your long-term retirement savings goals.

Maintaining Perspective

World events impact financial markets—sometimes significantly. But what, if anything, should retirement investors do in response? For those investors with a long-term perspective, the right answer may be to do nothing. In general, the biggest risk investors face over time is overreacting to events and market volatility. So, how can you manage your response to short-term noise? Here are some tips to help you keep calm and carry on.

Managing Your Portfolio

A long-term perspective and diversified portfolio remain the best ways to take advantage of investment opportunities and hedge against risks, but staying the course is sometimes easier said than done. To ensure that your retirement portfolio is positioned to benefit from future market upswings, keep these tips in mind:

• Resist the urge to sell. Even though your 401(k) may have lost some value over the past few weeks, it pays to stick to your plan. Allowing emotions to drive your decisions could mean missing out on potential gains when the market stabilizes.
• Don't try to time the market. When you stray from your well-thought-out plan to chase higher returns, your 401(k) account performance may get worse, not better. We know that past performance does not guarantee future results, and that historically, when it comes to the various asset classes, there is no discernible pattern of winners and losers. Because there is no way to predict next month's or next year's winners, you have a better chance of doing well by holding a wide range of investments and maintaining a long-term focus.
• Keep contributing to your 401(k). Although you may feel uneasy looking at your account balance right now, this is not the time to stop contributing to your 401(k). or other retirement savings vehicles. Doing so could mean leaving valuable employer-matching contributions on the table. Further, if you reduce your contribution rate, you also reduce your ability to benefit from the magic of compound interest.
  
  

Getting an Expert Opinion

It's understandable to be anxious about how recent market fluctuations will impact your retirement goals. A financial advisor can help you feel more confident in your long-term investment strategy by reviewing your account and ensuring that your assets are well-diversified.

As a guest blogger, I'm unable to respond directly to comments posted below, but if you have any questions or would like to discuss your strategy, please don't hesitate to reach out to me directly at 978-808-8665 or ksmith@axialfg.com.