Ups and downs are a natural part of investing, but it's one thing to know that and another thing to watch your 401(k) plummet after you worked so hard to save. It's stressful, but easier to manage when you have a solid strategy.

Some people panic and sell when their investments are down in an attempt to prevent further losses. But as a CFP® professional, I prefer a different approach. While I can't give you personalized financial advice without knowing your situation, it's definitely an option you ought to consider.

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Staying the course is your best move

Selling your investments when they're down can seem like a smart decision if you're worried they might sink further. But what you're actually doing is locking in your losses. Had you remained invested, your stocks might have rebounded in a few months, and you could have profited from that growth.

That's why I prefer to follow a strategy known as dollar-cost averaging. This is where you invest a specific amount of money on a set schedule. That might be $500 every month or $350 every two weeks. The schedule and the amount can be flexible. What's important is that you have a plan and you stick to it.

This strategy is easy to automate. Once you set up your schedule, you don't need to check your retirement accounts constantly. This is helpful if you're prone to stressing out over short-term ups and downs. You can check your portfolio less often, which might make you less tempted to sell when you're better off holding on and waiting for the market to improve.

It also helps you pay an average cost for all your shares. Sometimes, you'll buy when shares are high, and you may get fewer shares per retirement account contribution. But when prices are down, you'll get more shares with the same amount of money. Over time, it evens out.

You don't have to worry about timing the market, which is extremely difficult to do. You just keep investing according to your schedule.

How to get started with dollar-cost averaging

If you save for retirement in a 401(k), you might be dollar-cost averaging already. You're deferring a set amount from each paycheck into your retirement account.

You can do something similar with an IRA. Check with your account provider to learn how you can set up automatic transfers from a linked bank account. This may take a bit of work initially, but once you have it going, you won't need to think about it.

Just ensure you set the transfers to happen when you know you'll have money in your account, like right after you get paid. You should also check the annual contribution limits on all of your retirement accounts to make sure you don't accidentally exceed them, or you could face tax penalties.