5 Tips for Investors to Weather Today's Volatile Stock Market
Wall Street has been on a roller coaster lately, and if you're worried about it, here are five things you can do to help make sure you'll be OK.


The last couple of weeks have been a bumpy ride for investors with large holdings in U.S. equity markets. For example, the S&P 500 index made major gains, closing above 3,000 for the first time ever on July 12, and hitting a record of 3,026 two weeks later.
Since then, the S&P 500 and the Dow Jones industrial average have whipsawed — with both falling as much as about 3% in one day alone, Aug. 5 — amid rising tensions in the U.S.-China trade dispute. After all the swings, the S&P is down approximately 5% from its record, as of Aug. 8, but it is still up approximately 18% for all of 2019 — a solid return.
Still, when the market slides so much in one day, it’s normal for people to wonder if they need to make changes to their investments. My view is that it’s not the time for people to make any drastic changes in their investment portfolios. Stock prices don’t go up every day, month or year. Corrections and even bear markets are normal.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
For investors who are accumulating money for retirement, stock declines can be an opportunity to buy stocks at lower prices. For those who are not in the accumulation phase, it’s a good time to review your current investments and modify your portfolio to fit your tolerance for risk.
Investors, regardless of their risk tolerance, should focus on their long-term goals. Here are five recommendations that can help guide you to make the right investment decisions to meet your needs:
1. For starters, don’t panic.
Making drastic changes to your investment portfolio — like moving most or all of your investment accounts into cash — may feel like the safe decision now, but such emotionally driven decisions are almost never a good idea. It’s important to have a long-term investment plan that you can stick with through the inevitable ups and downs of the market. Otherwise you’ll be subject to the whims of your emotions, which often leads to buying stocks near market peaks and selling near market bottoms.
2. Next, take a close look at your current portfolio.
Investors who are extremely anxious about the recent pullback in stock prices should consider re-aligning their portfolios by reducing the percentage of stocks. People with a lower risk tolerance will sleep easier and be better prepared if the stock market decline continues and turns into a bear market, which is defined as a decline of 20% or more in stock prices, if they lower their allocation to stocks now. Adjusting your stock-to-bond ratio by 10% or 20% is much smarter than going “all in” or “all out” of any asset class. If a portion of your portfolio is not in stocks or investments that can grow like stocks, in order to have enough money to retire, a person will likely need to save more money or work longer.
3. Be ready to rebalance.
Just as it is important to rebalance your account during a bull market to keep your stocks and bonds on target, have a plan in place to rebalance your portfolio if further stock declines occur.
4. Pump up your 401(k).
For people who are still working, set aside more money into a 401(k) or business retirement account before the end of the year. Those under age 50 can contribute up to $19,000 this year to their 401(k), while those age 60 and over can contribute up to $25,000. Regardless of whether stock prices are up or down, it’s wise to maximum fund your 401(k) each year you’re working. What you save can have a much greater impact on your ability to meet your retirement goals than the returns in your portfolio. Saving puts you more in control of your financial future.
5. Remember that you’re in it for the long haul.
The stock market will periodically experience wide swings, but don’t allow the daily ups and downs to deter plans to invest for the long haul. Continue to make periodic investments that will pay off down the road. Always remember it’s “time in the market” not “timing the market” that leads to successful investing outcomes.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Lisa Brown, CFP®, CIMA®, is author of "Girl Talk, Money Talk, The Smart Girl's Guide to Money After College” and “Girl Talk, Money Talk II, Financially Fit and Fabulous in Your 40s and 50s". She is the Practice Area Leader for corporate professionals and executives at wealth management firm CI Brightworth in Atlanta. Advising busy corporate executives on their finances for nearly 20 years has been her passion inside the office. Outside the office she's an avid runner, cyclist and supporter of charitable causes focused on homeless children and their families.
-
Should You Start a 'Trump Account' for Your Child?
"Trump Accounts" for kids is part of the One Big, Beautiful Bill that was just signed. Look at if it's worth it for your children.
-
I'm a Financial Strategist: This Is the Investment Trap That Keeps Smart Investors on the Sidelines
Forget FOMO. FOGI — Fear of Getting In — is the feeling you need to learn how to manage so you don't miss out on future investment gains.
-
I'm a Financial Strategist: This Is the Investment Trap That Keeps Smart Investors on the Sidelines
Forget FOMO. FOGI — Fear of Getting In — is the feeling you need to learn how to manage so you don't miss out on future investment gains.
-
Can You Be a Good Parent to an Only Child When You're Also a Business Owner?
Author and social psychologist Susan Newman offers advice to business-owner parents on how to raise a well-adjusted single child by avoiding overcompensation and encouraging chores.
-
How Advisers Can Steer Their Clients Through Market Storms (and Strengthen Their Relationships)
Financial advisers need to be strategic when they communicate with clients during market volatility. The goal is to not only reassure them but to also help them avoid rash decisions, deepen your relationship with them and build lasting trust.
-
Stock Market Today: President Trump Reboots the Tariff Trade
A broad consensus that markets hate uncertainty more than anything else is being tested on an almost daily basis in 2025.
-
The Hidden Costs of Caregiving: Crisis Goes Well Beyond Financial Issues
Many caregivers are drained emotionally as well as financially, leading to depression, burnout and depleted retirement prospects. What's to be done?
-
Cash Balance Plans: An Expert Guide to the High Earner's Secret Weapon for Retirement
Cash balance plans offer business owners and high-income professionals a powerful way to significantly boost retirement savings and reduce taxes.
-
Five Things You Can Learn From Jimmy Buffett's Estate Dispute
The dispute over Jimmy Buffett's estate highlights crucial lessons for the rest of us on trust creation, including the importance of co-trustee selection, proactive communication and options for conflict resolution.
-
I'm a Financial Adviser: For True Diversification, Think Beyond the Basic Stock-Bond Portfolio
Amid rising uncertainty and inflation, effective portfolio diversification needs to extend beyond just stocks and bonds to truly manage risk.