people wear medical masks in public

By Jean Chatzky, Savvy Money

At this point, buckle up and stay put

There is no way to soften the bad news COVID-19 has brought in recent weeks to the economy and the stock market. It’s important to remember that this is not 2008 in that — until the virus took hold, at least — the economy was healthy with unemployment low and growth steady.

But that’s not much solace when you’re seeing gains of the last two years evaporate, seemingly overnight. For those of you with money in the markets — via 401(k)s, IRAs, 529s and other brokerage accounts — it is understandable to feel uneasy, frightened, anxious and the like.

That said, we have experienced big drops in the markets before. In 1987, 2001, 2008, markets cratered — and eventually recovered. The bull market that emerged after the financial crisis was the longest in history. But among the lessons that history has taught us is that gains like the 30%-plus we had last year in the S&P were unsustainable. We knew it would end. We just didn’t know when.

The question is. What do you do now? A few suggestions.

  • Don’t pull your money out in a panic. Especially if you’re a long term investor and have a lot of time on your side, says Ron Insana, CNBC Contributor. Even though your gut might be telling you differently, try to remember that the people who got hurt most during the financial crisis were those who pulled their money out and never got back in. This is especially true if you have at least 10 years between you and your goal, Insana adds.

  • Revisit your investment mix. Because the market has gone up for such a long time, you may still be taking more risk than you feel comfortable with. Decide how much of your money you want in stocks (higher risk) vs. bonds (lower risk) and try to move your portfolio in that direction

  • It may be time to buy. Take advantage of lower prices in the market to buy shares at a discount from where they’ve been trading in recent years. Remember that the investments you make now will likely pay off in the long run.

  • Take advantage of interest rates. Last week, the Federal Reserve cut short term interest rates by one-half of one percent. That may present an opportunity to save some money by refinancing your mortgage. As CNBC, reports, some 13 million homeowners could benefit from this sort of transaction — to the tune of an average savings of $277 a month.

With Rebecca Cohen