Were you one of those kids who hated to have the Band-Aid taken off your boo-boos?

I sure was. I'd wait, and wait, and wait, filled with absolute dread at the prospect of the shocking awful pain I'd surely suffer as Mom ripped it off my knee or whatever.

Johnson & Johnson (NYSE:JNJ) offers lots of different kinds of Band-Aids these days. But back in the 1970s, when I was a kid, there were only a couple of different kinds -- and the kind my parents bought had an interesting property.

The longer you left them on, the stickier they seemed to get.

I don't know what it was about them, because everyone knows that Band-Aids tend to fall off eventually -- like, when they get wet. But these seemed (from my 6-year-old's perspective) to practically weld themselves to my skin.

Which meant that the longer I waited to have Mom or Dad pull it off, the more it would hurt. Not only would I have the added psychological suffering of worrying about it, but it would actually sting more when it finally got yanked off.

Why am I writing about Band-Aids? Let me put it this way: Have you looked at your retirement portfolio recently?

Taking a hard look at where you're at now
If you've been hiding your statements under a pile of papers on your desk, I understand. You're not alone. But you and I both know that the first step in repairing something is to understand how badly it's broken. And let's face it, knowing is almost always better than worrying about an unknown.

So grab a soothing libation, have a look, and ponder these points while you do.

Are your reasons for owning the stocks you own still valid?
There were arguments for buying into stocks like homebuilder Toll Brothers (NYSE:TOL), office-furniture maker Knoll (NYSE:KNL), or if you were brave, even General Motors (NYSE:GM) last spring. Back then, many observers thought the recession wouldn't be too harsh, and that the bear would pass. Those arguments are a little harder to make now. And there are always stocks, like undies-makers Hanesbrands (NYSE:HBI) that may have deteriorated because of more mundane factors, like increased competition or eroding margins. Don't get caught up in the trap of "waiting for it to come back": If you wouldn't buy it at today's prices, sell it.

Are your holdings still in line with your overall plan?
You do have a plan, don't you? An asset allocation model? If not, get one -- your employer's 401(k) plan sponsor probably has a Web-based tool that can help you put together a decent one. (If not, or if you'd like to see some really good ones, check out the model portfolios offered by the Fool's Rule Your Retirement newsletter.)

Are you still comfortable with your plan?
An aggressive 100%-stocks plan that seemed great three years ago might not make you feel warm and fuzzy now. If in doubt, go back to that Web-based tool, and do the questionnaire again with your current risk tolerance in mind.

It's possible you'll find that your plan is still valid, your holdings are still in line with it, and the damage you've taken is consistent with the overall market decline. But if you're no longer fine holding what you've got, at least you know the problems. Now it's time to think about the solution.

Making repairs
This might be a once-in-a-lifetime economic crisis, as the pundits say. But I know two things for sure: The stock market will recover, and there will be another bear market someday. Here's what to do now to be ready for the future.

1. Get into the best investments you can
Pick the best funds -- and the ones that best fit with your plan -- available in your 401(k). If you have sizable accounts other than your 401(k), remember that your asset allocation plan covers all of them, as one unit. Look at the best options in your plan -- whatever they are -- and see whether it makes sense to buy them and use your other accounts to meet your overall allocation goals. 

For IRAs or taxable accounts, look at stocks that still have a compelling long-term growth story, like explosive metals specialists Dynamic Materials (NASDAQ:BOOM) -- or which pay fat recession-resistant dividends. Johnson & Johnson comes to mind, as does oil-transporter Teppco (NYSE:TPP), which currently sports a whopping 15% dividend yield. At the same time, if you're feeling rattled by the damage your portfolio has taken, move some of your allocation into more conservative investments -- but be smart about it.

2. Keep investing
Keep making those 401(k) and IRA contributions. Whether the markets go lower from here or not, they're sure to go higher eventually, making today's prices look like bargains. And yes, "eventually" might be a few years or even more. But as retirement-focused investors, we can afford to take the long view.

3. Stay informed, and don't be afraid to ask for help
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 an excellent resource for retirement investing in challenging times. A free trial gives you full access for 30 days, with no obligation.

Fool contributor John Rosevear has no position in the stocks mentioned. Dynamic Materials is a Motley Fool Hidden Gems selection. Teppco and Johnson & Johnson are Motley Fool Income Investor recommendations. Try any of our Foolish newsletters free for 30 days. The Fool's disclosure policy will kiss those disclosure boo-boos good-bye.