Guidance for Investors: Words of Wisdom for Navigating Turbulent Markets

By Bernadette Davis, Vice President, TIAA-CREF Client Services

The unprecedented market volatility has prompted many of you to contact us here at TIAA-CREF.  Below are some important points to keep in mind during these turbulent times that address many of the issues you have raised to us.

Think Before Locking In Your Losses: While stock markets have fallen sharply, by selling when the market is down, you may be locking in losses that until then had only occurred on paper. If you hope to reenter the market at a later time, you may be buying back these stocks at higher prices. In essence you will be selling low and buying high, the opposite of what most people want to do when investing.

• If you feel compelled to sell your stock holdings based solely on the market decline, you might consider doing so in a way that is consistent with your long-term asset allocation plan and savings goals.

Remember Why You Diversified: Remember that you allocated money to stocks as part of a diversified portfolio for a good reason: historically, stocks have outperformed many other asset classes and have repeatedly recovered from steep drops over time.  Of course, past performance is no guarantee of future results.

Don't Break Good Habits: If you are making voluntary contributions to a retirement saving and investing plan, the downturn in the stock market makes those contributions more important than ever before. However, the stock market's recent volatility may make you wonder whether that is the right thing to do. Putting money aside for your future on a regular basis is an excellent habit, and this is no time to break it.  You can find investment options that match your risk tolerance.

Keep Thinking Long-Term:  As unsettling as these turbulent times are, we encourage you to stay focused on the long term, and not to react in ways that might endanger your long-term financial well-being.  It doesn't matter whether you are planning to retire next year or in 2050. In either case, your need for retirement income may stretch over several decades; if so, that makes you a long-term investor.

• Even if you are close to retirement your savings and investment time horizon doesn't end the day you retire. You probably are not planning to withdraw all of your retirement assets in the next few years. You are looking forward to living for decades in retirement, and a lot can happen in the markets during that time.

Decades of experience have taught us that adhering to sound fundamental principles-in both stable and volatile markets-benefits a participant over the long run.

TIAA-CREF is committed to keeping you informed, and will provide regularly updated communications about managing your accounts.