Today senior analyst Eric Bleeker answers a reader's question, who asks "How can I protect my stock-heavy retirement account."
After checking with our personal finance guru Dan Caplinger, Eric still thinks that a stock-heavy asset allocation is appropriate for investors with a long investing horizon, though both recommend revisiting your portfolio allocations from time to time to rebalance to something more in line with your investing horizon and risk tolerance.
Radical knee-jerk reactions, like cashing out, or putting your money under the mattress, do more harm than good.
Remember, while the Dow Jones Industrial Average (INDEX: ^DJI) fell more than 50% in the economic crisis, over the last 10 years, it's rebounded nicely, and is still up nearly 70%. Sometimes, it can be hard to forget just how long a horizon is needed for the patient investor, but those that stay pat usually fare well.
Click the green button below to join the thousands of people celebrating Worldwide Invest Better Day on September 25!
The article Ask a Fool: How Can I Protect My Stock-Heavy Retirement Fund if a Recession Hits? originally appeared on Fool.com.
Eric Bleeker has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.