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Question: I have some money in 401K but it’s all vanishing because of the stock market drop. Is it a good idea to ride it out,or transfer the money out of stocks (investment optons) and put it in a safe stable fund? Frank, Satellite Beach, FL

Answer: A bear is mauling the stock market, and the worst may be yet to come. The S&P 500 is down some 17% from its October high, still in so-called correction territory but not all that distant from the 20% decline that traditionally defines a bear market. The desire to get away from the carnage is understandable. (My answer to your question assumes that you’re still in the “accumulation” stage of life, working and adding to your retirement portfolio.)

Still, for many investors the first rule of managing money in a downturn seems to be “do no harm.” When people try to time the market, the result is usually disastrous. The average saver who sits tight with their retirement money during a bear market typically does much better than the person that gets in and out of the market.

That said, my mantra is to take advantage of this time by figuring out whether you’re comfortable with your portfolio. Are you too much in stocks? Bonds? International? How do you wish your portfolio was constructed? Once you’ve figured that out, then I would create that portfolio over time.

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