Staying Focused in Turbulent Times

By James Barnes
Published: Monday, May 24, 2010
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When the market is volatile, people think about their financial future. With current market events as turbulent as they are, you may be concerned about their potential impact on your 401(k) account. During times like this, it is more important than ever to follow certain basic, time-tested principles of investing.

Continue contributions.

It may not seem intuitive, but continuing to contribute to your 401(k) plan—even during market downturns like this one—can enhance your returns over the long run. A down market can be an opportunity for you to acquire more shares of your investments at a lower price. Consistent investing through market ups and downs is called “dollar-cost averaging.” If an investment’s price is high, you buy fewer shares, or units. When prices are low, you buy more. Investing regularly, using dollar-cost averaging, can help reduce the risk associated with buying during big swings in market prices.


If you have ever heard the saying, “Don’t put all your eggs in one basket,” then you already have a basic understanding of diversification. Diversifying your portfolio can reduce risk and volatility. Review your account and make sure your portfolio is not heavily weighted in company stock or in any single asset class.

Stay invested.

You may be anxious about the decrease in the value of your investments. Resist any temptation to move out of the market, sit on the sidelines, and wait for prices to rebound. No one knows when the bottom will come or when a rebound might begin. Trying to time the market could jeopardize your financial plan—and your future goals.

Maintain a long-term focus.

Any investment decisions you make should be based on your financial goals and objectives, time horizon, and risk tolerance, rather than concerns about market volatility. Even if the market seems volatile right now, remember that ups and downs are normal. It is important to stay focused on your financial future and refrain from making short-term decisions on long-term investments.

History demonstrates that there will always be some degree of uncertainty and volatility in the markets. While market events are out of your control, you do have control over your financial objectives and how to allocate investments to help achieve them. A reputable financial advisor can assist you with determining the mix of asset classes that best meet your financial objectives. For more information on how to protect your financial health, visit

—by the Smith Barney division of Citigroup Global Markets, Inc

Courtesy of James W. Byrnes,

Financial Advisor

James Byrnes is a financial advisor in Global Wealth Management with Citi Smith Barney. He specializes in retirement planning, estate planning, risk management strategies, and multigenerational wealth planning. He can be reached at (732) 979-9854 or by e-mail at james.w.byrnes@

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