Ask a Fool: How Can I Protect My Stock-Heavy Retirement Fund if a Recession Hits?

Eric Bleeker
Eric Bleeker
Sep 24, 2012 at 12:00AM
Other
Today senior analyst Eric Bleeker answers a reader's question, who asks "How can I protect my stock-heavy retirement account."
 
After checking with our personal finance guru Dan Caplinger, Eric still thinks that a stock-heavy asset allocation is appropriate for investors with a long investing horizon, though both recommend revisiting your portfolio allocations from time to time to rebalance to something more in line with your investing horizon and risk tolerance. 
 
Radical knee-jerk reactions, like cashing out, or putting your money under the mattress, do more harm than good.
 
Remember, while the Dow Jones Industrial Average (INDEX: ^DJI) fell more than 50% in the economic crisis, over the last 10 years, it's rebounded nicely, and is still up nearly 70%. Sometimes, it can be hard to forget just how long a horizon is needed for the patient investor, but those that stay pat usually fare well.

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