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The markets are down. Here’s how to manage your investments: Life Kit: NPR

Photograph of a dollar bill against a fuchsia background.  The dollar shines about a third of the way and starts oscillating up and down as it looks like a downtrend chart.

Michael Raines/Getty Images

Photograph of a dollar bill against a fuchsia background.  The dollar shines about a third of the way and starts oscillating up and down as it looks like a downtrend chart.

Michael Raines/Getty Images

Have you reviewed your retirement plan lately? Not. Major indices like the S&P 500 and Russell 1000 just hit 52-week lows. And the Dow fell into a so-called “bear market,” meaning stocks are down 20% from their recent high. All of this means your stocks are probably worth a lot less than they were a year ago.

So how should you be managing your investments right now? Bola Sokunbi, Founder and CEO of Clever Girl Finance, a personal finance education platform for women, speaks to Life Kit about what needs to be done — and how to manage the stress and anxiety of the changing markets.

Here are some takeaways from the conversation:

  • Don’t pull out your money! If you have money in a retirement plan or investment account and markets have fallen significantly, that’s actually the worst time to sell your stock, Sokunbi says. A stock is an asset. Today it may be worth less than what you paid for it. But “if you don’t actually sell it, you haven’t lost anything,” she says. “At this point you want to sit out what’s going on in the markets because economies are cyclical.” This Life Kit episode on investing provides a helpful explanation of these cycles – and it includes a rollercoaster metaphor.
  • Take a break from logging into your accounts. When you see your investment accounts fall in value, many emotions can surface: fear, concern, regret, and anger, says Sokunbi — so try not to check your investment accounts more than necessary. “If you don’t need the money any time soon, it’s okay not to log into your account this week, month or quarter,” she says. Instead, divert your attention to something else. read a good book Spend time with your friends. Go for a walk (here’s a handy Life Kit guide on how to enjoy the great outdoors).
  • Now is actually a good time to invest. While this may not be the right time to sell your stocks, it is a good time to buy stocks, Sokunbi says. Since share prices have fallen sharply, you can get more shares for less money. “Basically, the stock market is selling off right now,” 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 in excess of 20%, Sokunbi says. You should generally pay these off before investing your extra dollars.
  • An evergreen tip: use your employer match. Many companies offer their employees a pension scheme. For example, if you invest 5% of your salary, your company can contribute the same amount for you. The financial media website Investopedia has a guide on how these matches work. If you can, Sokunbi says, always invest at least enough to get full compliance. Otherwise refuse 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 voice message at 202-216-9823or email us [email protected].

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