How's your portfolio looking these days?

If you still haven't been willing to peek, you're not alone. Dozens of people I've talked to in the last few weeks have told me that they're not even going to look at their long-term holdings until the end of the year, at the earliest.

When we fear the worst, it seems safer not to confront it directly. And if your retirement is still a long way off, it may seem like there's no need to confront it at all right now.

After all, the market will bounce eventually, right?

Yes, but...
If history is any guide -- and when it comes to markets, it usually is -- the stock market will recover over time. It may take several years, and it may get even worse before it gets better, but eventually, America's mighty engine of economic growth will reassert itself. When that happens, investors will be willing to pay up to buy some of that growth, and stock prices will start to rise in a sustainable way.

Meanwhile, here we are down in the dumps. And if you've been holding stocks during the ride down, you've probably taken some significant losses. Things might even be as bad as you fear.

But the recent market fall has created pain and opportunity in equal measure. There are things you can do right now -- yes, even with your battered portfolio -- to help you limit further damage while setting you up for significant gains later.

If you do it right, you might even see some gains soon.

Action steps for right now
Suck up that fear and crack open those financial statements, Fool. Right now -- when everything's cheap -- is a fine time to sell what you don't need, and buy more of what you do. The sooner you get your portfolio focused on your long-term goals, the sooner it'll start getting you closer to meeting them. Here's what to do:

1. Get a plan.
I won't rehash the case for asset allocation here, except to say that its benefits are significant and scientifically proven. Get a good allocation template -- your 401(k) provider's website can probably generate a decent one, or check out the excellent models provided by the Fool's Rule Your Retirement service -- and get ready to take a hard look at all of your holdings.

2. Move into good investments. The choices available in your 401(k) should have all of the basic allocation bases covered. If you're working with a taxable account or an IRA, your choices are much broader. Use the Fool's CAPS screener to create a list of stocks to investigate. It's easy, especially when you use the preset screens to find growth, value, or dividend stocks by market cap. I just ran a quick screen for highly rated large caps with hefty dividends and came up with a long list, including these:


CAPS rating

Dividend yield as of 10/21

GlaxoSmithKline (NYSE:GSK)



PepsiCo (NYSE:PEP)






Manulife (NYSE:MFC)



Titanium Metals (NYSE:TIE)



Vimpel Communications (NYSE:VIP)






Source: Motley Fool CAPS, Yahoo! Finance.

Are any of these worth buying? I don't know yet. Reinvested dividends are a great way to lock in some growth during rough times, but dividends often get cut during recessions. But there are some strong candidates for further inquiry here.

3. Keep investing.
It's especially important to keep contributing to your 401(k) and IRAs now, if you can afford it. Those who buy great stocks while the market is down will see big gains in coming years. I want my share of those big gains, and I'm sure you do, too.

4. Stay informed.
Whether you're looking for asset allocation guidance, help choosing the best options in your 401(k), strategies for getting through the downturn, or just some reassurance that you're doing the right things, the Fool's Rule Your Retirement newsletter service is the best way to stay on top of the retirement investing game. It's a complete source of guidance for retirement investors in these difficult times. A free pass gives you full access for 30 days.