Markets have reacted to recent geopolitical events: oil has risen and stocks have dipped, trimming the value of many college and retirement accounts. The Dow sits about 9% below its February high — not a bear market, but enough to prompt questions about what to do. The right move depends on when you will need the money.
If you won’t need the money for 10 or more years: hands off
If your time horizon is a decade or longer, advisers generally say the best action is often inaction. Markets have historically recovered from shocks, sometimes quickly and sometimes over a few years. Reacting emotionally to a short-term drop locks in losses. Long-horizon investors can consider using dips to add to positions, but only if they are comfortable with the possibility of further declines. Buying during a downturn can be beneficial, but you need the stomach for continued volatility.
If retirement or withdrawals are only a few years away: shift toward safety
When you plan to use the funds within a few years, you should reduce the risk that a future shock will force you to sell at a loss. That commonly means moving some money from volatile stocks into more stable assets such as U.S. Treasury bonds or other conservative holdings. Many retirement accounts do this automatically through target-date funds that progressively lower stock exposure as the target year approaches. College 529 plans often use similar glide paths.
Diversification across U.S. and international stocks and bonds also helps spread risk and capture returns when different regions perform differently. International funds that lag in one period may lead in another, so buying foreign exposure at lower prices can be advantageous for long-term investors.
If you need the money now: be rational and deliberate
If you must withdraw funds amid a shaky market and haven’t already shifted into conservative assets, take measured steps to limit damage. Withdraw from accounts or funds that are holding up best rather than selling your biggest losers; locking in large losses by selling the worst performers removes any chance they might recover. Take only what you need and leave as much invested as possible so it can participate in future rebounds.
Also consider practical choices to reduce the need to liquidate: cut discretionary expenses, delay retirement if possible, and avoid panic selling. Acting calmly and rationally, even if it is difficult, usually preserves more wealth than emotionally driven decisions.
Bottom line
Match your response to your timeline. If you have many years, avoid knee-jerk moves and consider using dips to add exposure. If withdrawals are only a few years away, shift toward stability and diversify. If you need cash now, prioritize preserving recovery potential by withdrawing sparingly, selling carefully, and making deliberate, unemotional choices.