4. Consider increasing your contributions

You may look back on this time as a missed opportunity to add to your equity holdings. Increasing your 401(k) contribution rate is almost always a good choice. Now, it may make even more sense as a cost-effective way to buy into the markets over many years.

5. Name your price

If you think you must reduce your equity holdings, make a plan for re-entry. Consider setting two prices: One that’s lower than where you sold, and another that’s higher. If the market doesn’t fall to the “smart move” price, better to buy back at the “oh, well” price than to give up growth potential.

Time is on your side

Most of us have years—perhaps even decades—when we can sell off equities. So why make any big moves now? Instead, take a moment to consider more effective and rational actions that might get better results in the long run.

Or just do nothing. This is one time when not taking action might make the most sense. Scott Dingwell is a Director in BlackRock’s Global Client Group where he serves on the U.S. and Canada Defined Contribution Team. He writes about retirement for The Blog.

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