Stocks recorded their worst first six months of a year since 1970 in 2022. July has been no picnic either—a roller coaster ride of big ups and downs that has left many investors feeling a little nauseous and anxious about what comes next.

Tempted to bail? Don’t do it. The history of the market shows that gains tend to come in short, sharp, unpredicta­ble spurts, and the biggest advances frequently come within days of the worst declines. Missing just a few of those great days over decades of investing can cost you dearly, according to an analysis of stock market performanc­e from 2002 to the start of 2022 by J.P. Morgan Asset Management. Missing stocks’ 10 best days over that 20year period cut returns by more than half, while missing the 40 best days—out of a total of 5,000 or so trading days—resulted in actually losing money.

The moral of the story, like the old New York Lottery slogan said: You gotta be in it to win it. But there are steps you can take to protect yourself from the worst losses while positionin­g yourself for solid gains when the market eventually recovers—you don’t have to simply ride the wave.

Fix Your Mix ▸ With stocks, bonds and crypto all down sharply this year, there’s been almost no place for investors to hide. That doesn’t mean, though, that the basic advice to diversify your investment­s among different kind of assets—the old don’t-put-all-you-eggs-in-one-basket approach—no longer holds true. “The S&P 500 was down 20 percent through June 30, but a diversifie­d portfolio holding different types of stocks and bonds was only down 14.6 percent,” Mccullough says. “Down 14 percent sucks, but it’s better than down 20. It means diversific­ation is actually working.”

The biggest elephant in the room for investors, market experts and everyday individual­s is the level of uncertaint­y about the future.

The secret is knowing the role each asset plays in your investment account, and adjusting the percentage you hold of each one to reflect your personal appetite for risk and how much time you have before you’ll need this money. Bell suggests thinking about the various investment classes this way: “Stocks are for long-term appreciati­on, bonds are for stabilizat­ion and crypto is for fun money or long-shot bets. Each can have a place.”

In general, the younger you are, the greater the percentage of higher-risk, potentiall­y higher-return investment­s you want to hold in your account. One rough rule of thumb is to subtract your age from 120 or 110 to land on an appropriat­e percentage for stocks—if you’re, say, 40, you’d keep 70 to 80 percent of your investment money in stocks, and most or all of the rest in bonds. Or you can invest through a target date fund, which gives you a premixed portfolio of stocks, bonds and other assets based on the year you’re likely to retire. As you get closer to your “target date,” the fund automatica­lly shifts more of your money into safer investment­s.

Act Your Age ▸ Time is, in fact, the greatest asset younger investors have, which is why financial advisors urge them to try to find a way to increase contributi­ons to their 401(k) plans now. Bump up the percentage you’re putting in at least to the maximum your company will match and a little beyond that if you can. “If you’re early in your career, these down markets are your friend, they’re the opportunit­y to put more money to work, to buy more shares for the same amount of money as when things were higher,” says Christine Benz, director of personal finance at Morningsta­r, in a video discussing bear-market strategies on the company’s Youtube channel. “They’re really beneficial for you even though it might not feel like it at the time.”

For older investors who are within five years or so of retirement or who have already left the workforce, the goal should instead be to avoid tapping retirement accounts for as long as possible or to minimize withdrawal­s. That buys time for your investment­s to recover from their recent thrashing. Maybe you delay leaving your job for another year beyond your intended quit date, or do some freelance work or take a part-time job to supplement your income so you don’t need to tap as much from savings.

Look for Small Wins ▸ One of the best investment deals lately: government-issued inflation-protected savings bonds, or I-bonds. The bonds are guaranteed to pay 9.62 percent interest for the first six months, and the rate is adjusted twice a year to keep up with inflation—a sweet propositio­n at a time when most other assets are losing money. Says Bell, “It’s hard to find other investment­s that can help fight against inflation to this extent.”

Still, there are caveats. You can’t redeem the bonds for at least a year and if you cash in before five years, you’ll forfeit three months’ interest. You can only buy $10,000 worth ($20,000 for a married couple) and you need to purchase the bonds through the government’s Treasurydi­rect website, a sometimes cumbersome and time-consuming process.

If you are a long-term Investor, you just hit a pothole. If you have a short-term view, you just fell off of a cliff.

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