How to Navigate Turbulent Stock Market Depends on When You Want to Retire

You know you’re not supposed to look, but it’s impossible to resist.

When stocks are plunging, checking your investment accounts is risky business. The market turbulence is jarring for younger investors, who had gotten used to the idea that stocks always go up. And for those with a bit more experience, watching hard-earned money suddenly disappear is a terrible experience.

During times like these, experts say that it pays to keep calm and not make any drastic, stress-fueled decisions. Remember: U.S. stocks have historically performed well when the Fed is raising rates, with an average annual return of 9% in the 12 rate-hike cycles since the 1950s.

Still, holding tight means dealing with volatility.

“As uncomfortable as this is, this is the admission price for being in the market,” said Keith Lerner, chief market strategist at Truist Advisory Services.

Here are some tips for surviving the market volatility, depending on your age:

If You’re 25

For young investors, market drops are an opportunity.

“The person who is youngest should be happy about this,” Lerner said. “Especially as they invest for retirement, they're getting things at cheaper prices.”

When stocks are falling, advisers say to keep investing according to your financial plan, especially involving 401(k) contributions and broad-based indexes like the S&P 500 or the Nasdaq 100.

“You may not even be thinking about your retirement but a Roth IRA is very valuable since it grows tax-free over time,” said Marguerita Cheng, founder of Blue Ocean Global Wealth.

Max Gokhman, chief investment officer at money manager AlphaTrAI Inc., recommends a core portfolio of diversified ETFs like the SPDR S&P 500 ETF Trust (SPY) or Vanguard Total Stock Market ETF (VTI). He stresses the importance of HODLing — crypto slang for “holding on for dear life,” or resisting the urge to sell when investments are in the red.

Even adding a bit of crypto exposure might be beneficial as a way to diversify, he said. Just don’t make it the majority of your holdings.

“Right now is a great time to buy, things are on sale,” said Craig Ferrantino, adviser and founder of Craig James Financial Services. “I don't worry about that saying about 'catching a falling knife' with someone who is 25 because if the market does fall farther they have more time to buy in again.”