Strengthening Your Portfolio in Challenging Times

With equity markets seemingly falling to new lows every day, some investors wonder what to do. The good news is that there may be steps you can take to diversify your portfolio and position yourself to take fullest advantage of the market's eventual recovery.

First, reconsider the urge to sell quality assets that have fallen in value. By doing so you lock in "paper" losses, or those that have not yet been realized through a sale of the asset. And, if you re-enter the market later, you may be buying back those stocks or funds at higher prices.

Also, 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. However, the stock market's recent volatility may make you wonder whether continuing to contribute to your retirement plan is the right thing to do. It is. 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.

Historically, stocks have outperformed other asset classes and have recovered from steep drops over time. Based on bear market and post bear market returns of the S&P 500 between 1990 and 2002, the average bear market has lasted 12 to 15 months with returns decreasing by 27% to 33%; it has typically been followed by a bull market which, in contrast, lasted an average of 4 to 4.5 years and enjoyed a total return of 140% to 160%.¹

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. Hopefully you look forward to living for decades in retirement, and a lot can happen in the markets during that time.

Of course, past performance is no guarantee of future results and diversification cannot eliminate the risk of investment losses.

If the market volatility leaves you feeling that you invested too heavily in one asset class, consider diversifying. Although not a guarantee against losses, diversification – allocating your savings to varied types of stocks, bonds, real estate and other asset classes – can be an effective strategy to help you manage risk. Each of these asset classes is available through TIAA-CREF view Retirement Plan Fund Research.

If you rebalance your portfolio, you may also consider investing some portion of your assets in a low-cost annuity that guarantees income for as long as you live. The TIAA Traditional account guarantees your principal and a minimum interest rate, plus it offers the opportunity for additional amounts in excess of the guaranteed rate.²  Log in to view your current allocation or to rebalance your account.

When you retire and annuitize your accumulated savings with TIAA Traditional, the income payments received in retirement are based on a minimum guaranteed rate.

Our advisors can help you rebalance your portfolio. TIAA-CREF's advice is objective and non-commissioned, and was lauded by Forbes as “the most extensive personal[ized] workplace advice. " ³ Request a personalized Advice session or call a Retirement Specialist at 1 800 842-2776.