The markets are down. Here's how to handle your investments : Life Kit About 60% of Americans have some money in the stock market — and the markets are not doing great. Your knee-jerk reaction might be to sell. But experts explain why that's not a good idea.

The markets are down. Here's how to handle your investments

The markets are down. Here's how to handle your investments

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Michael Raines/Getty Images
Photograph of a dollar bill against a fuchsia background. The dollar  glitches about one third of the way in and starts to oscillate up and down as it looks like a downward trending graph.
Michael Raines/Getty Images

Have you checked your retirement plan lately? Don't. Big indices like the S&P 500 and the Russell 1000 just hit 52-week lows. And the Dow fell into what experts call a "bear market," which means stocks have fallen 20% from a recent high. This all means that your stocks are probably worth a lot less than they were a year ago.

So how should you be handling your investments at the moment? Bola Sokunbi, founder and CEO of Clever Girl Finance, a personal finance education platform for women, talks to Life Kit about what to do — and how to manage the stress and anxiety around the changing markets.

Here are some takeaways from the conversation:

  • Don't pull your money out!  If you have money in a retirement plan or investment account and the markets have dropped significantly, that's actually the worst time to sell your stocks, says Sokunbi. A stock is an asset. Today, it may be valued at less than what you paid for it. But "unless you actually sell it, you haven't lost anything," she says. "At this time, you want to ride out what's going on in the markets because economies are cyclical." This Life Kit episode on investing has a helpful explanation on these cycles — and it involves a roller coaster metaphor. 
  • Take a break from logging into your accounts. A lot of emotions can come up when you see your investment accounts plunge in value: fear, anxiety, regret and anger, says Sokunbi — so try not to check your investment accounts more than necessary. "If you don't need the money anytime soon, then it's OK not to log into your account this week or this month or this quarter," she says. Instead, turn your attention elsewhere. Read a good book. Spend time with your friends. Go for a walk (here's a handy Life Kit guide on how to enjoy nature).
  • Now is actually a good time to invest. Although this may not be the right time to sell your stocks, it is a good time to buy shares, says Sokunbi. Because stock prices have dropped significantly, you can get more shares for less money. "Essentially right now, the stock market is on sale," she explains. "And we all love a good sale."
  • But ... only invest if you can afford it. Some questions to ask yourself before investing: do you have enough savings to cover your basic living expenses if you lose your job? Have you paid off your high-interest loans? Many credit cards charge interest rates of more than 20%, Sokunbi says. You should generally pay those off before investing your extra dollars. 
  • An evergreen tip: Take advantage of your employer match. Many companies offer employees a retirement plan match. If you invest, say, 5% of your salary, your company may contribute the same amount on your behalf. The financial media website Investopedia has a guide to how these matches work. If you can, says Sokunbi, always invest at least enough to get the full match. Otherwise, you're turning down free money. 

The audio portion of this episode was produced by Clare Marie Schneider. The digital story was edited by Malaka Gharib. We'd love to hear from you. Leave us a voicemail at 202-216-9823, or email us at LifeKit@npr.org.