I'll go out on a limb here and assume your 401k & IRAs have taken a thorough beating by now. If you're like most and have money invested in the market then checking your balance right now might stir some emotions that induce concern, worry, or even panic. Just sit down and breathe for a minute. Poor markets cause many people to make terrible choices with their money, simply because they don't truly understand what they're doing. I often use this example: If you are afraid to fire a gun, it's likely because you don't understand how to use it. If you did know how then you wouldn't be afraid of it. Let's run through a few scenarios to get a good idea of what to do.
First off, let's assume you're very risk-averse and don't like to invest because you "could" lose money. I have met many people who take this approach and tie their money up in bank accounts, stable value, and CDs so that they aren't exposed to potential loss. What they don't realize is after inflation and taxes they are left with a negative return. This is ironic because they can't tolerate risk & potential loss yet they allocate their money in a way that guarantees a loss every single year.
Many people are overexposed to risk or are too aggressive with their money. There is nothing wrong with being aggressive as long as it fits your goals and needs. You also need to have a full understanding of the portfolio fluctuations that come with being aggressive. If you are being greedy and trying to get more return than you can emotionally handle then the market can quickly serve you an unwanted dose of humility. If you're retired or close to retirement and take a massive loss, it can force you to go back to work or delay retirement. If you're being more conservative than you should then you may not get to retire because you spent 20-30 years missing out on added returns and now, those years are gone. There is a balance to be had and that balance is determined by your needs, goals, and risk tolerance.
The best thing you can do to protect your money (if you've taken a loss in the market) is to do nothing at all. Leave it alone! If your money is invested appropriately, it will grow back as it has done so many times before.
Ponder this: If you buy one share of a mutual fund for $100 (just using a simple number here) and it falls to $85 and you sell it then you have a loss of $15. You can never get that money back. It's forever gone. If it falls to $85 and you continue to hold it (because you know good and well it will come back) then you haven't lost anything because you never sold or "realized" the loss. This isn't complicated at all. As long as you hold quality investments and are properly diversified then do not sell simply because the market has dropped. Don't believe me? Then take it from Warren Buffett or Jack Bogle. After all, they're only considered the greatest
investors of all time.
At the end of the day, if you have been waiting for a good time to get in the market and invest money, it doesn't get much better than now. If you were in the market and taking a beating, turn off the news and wait it out. America is resilient and has won fights much tougher than this in the past. We will win this one too.