Imagine that you've entrusted your money to a respected financial advisor. Then, one day, you see that you've lost a big chunk of your nest egg. The loss might owe to ineptitude on his part, or to the stock market falling some 40% in 2008. Heck, in 2008, even an advisor who had you in well-regarded blue chips would have delivered substantial losses:


2008 Return



Boeing (NYSE:BA)




Altria (NYSE:MO)


Corning (NYSE:GLW)


American Express (NYSE:AXP)


Coca-Cola (NYSE:KO)


Data: Morningstar.

If your nest egg was worth $250,000 pre-2008, and it ended the year at $150,000, that would be quite a shock. If you'd come to me, alarmed, I'd have tried to comfort you by pointing out that most likely, you weren't planning on liquidating your stock holdings at the end of 2008, that you probably had many more years left in the stock market, during which time many of your holdings would rebound. Indeed:


2009 Year-to-Date*











American Express




Data: Morningstar. As of Sept. 1.

Not bad, eh? They average 35%, and would take your $150,000 to about $202,000, a solid improvement. (Of course, sometimes rebounds can take much longer to arrive.)

What to do
So what should you do when faced with such losses? Here's one thing you should not do: Kidnap, torture, and hold for ransom your financial advisor. That's reportedly what two German couples did, after losing much of several million dollars entrusted to their advisor.

Got that? No kidnapping. Don't give up on stocks, either.

Instead, you might want to:

  • Crank up your saving and investing. The more you put in, the more you should end up with. If you're 50 or older, take advantage of "catch-up" contributions you can make to your retirement accounts beyond the regular limits. With 401(k)s in 2009, most folks can contribute up to $16,500, but those 50 or older can add an extra $5,500. With IRAs, those 50 or older can chip in up to $6,000 in 2009, instead of the regular $5,000 limit.
  • Think about working a few more years. Just two more years can give you hundreds of thousands more to live off of, while seven years might deliver an extra million!

Do that, and you'll have taken your first steps toward turning those losses into profits.

If you're not investing because you don't have perfect timing, you're making a mistake. Find out from Selena how many investors screwed up and prospered anyway.

Longtime Fool contributor Selena Maranjian owns shares of American Express, Corning, and Coca-Cola. American Express and Coca-Cola are Motley Fool Inside Value selections. Coca-Cola is a Motley Fool Income Investor recommendation. The Fool formerly owned shares of American Express. Try any of our investing newsletters free for 30 days. The Motley Fool is Fools writing for Fools.