• Don’t Panic and React Without an Assessment. The recent volatility of the stock market can unnerve even the most stalwart individuals. Looking over account statements where there have been downward fluctuations of three to 10 percent in principal value is frightening. When the investment was initiated, there were goals, objectives, risk tolerance parameters and a timeline that was assessed. Review that information and determine whether any of those factors have changed. If not, stay the course. If so, make needed adjustments to the portfolio to reflect your current investment posture.
  
  
• Keep Adding to Your Investment Portfolios and Become a Value Investor. Unfortunately, declines in the market cause individuals to contract and stop investing altogether. The immediate response to the wild market swings is to hold tight to money and not add to 401k accounts or other accounts that are established for systematic investments. This is absolutely the wrong move at the wrong time. At the risk of sounding trite, we like to buy everything on sale but stocks! When the stock market goes down and companies with good earnings and growth potential go down with the broader market, we stop adding to those positions. This would be just the time to buy quality at a discount. Buck the crowd and stay the course with well-researched and allocated portfolios and add money monthly to those accounts.
  
  
• Remember Asset Allocation Matters. All investment categories go through cycles of increase and decline. When the stock market went through the severe decline of the “Tech Bubble” some years ago, many investors abandoned the stock market for what they thought was the “safer” investment class of real estate. Novice real estate investors bought multi-unit buildings for rental income or purchased homes to rehab and sell for a quick profit. The problem came for those that were over-weighted in real estate and did not have assets in other types of investments. The wisdom of not putting “all your eggs in one basket” applies here. Maintain positions in various asset classes so that you can benefit from the fluctuations that occur and do not miss out on growth in different investments.
  
  
• Review Your Debt and Spending Level. Many Americans are saddled with large amounts of credit card debt. If you have large balances that you carry from month to month and are only able to pay the minimum balance, there may be a problem looming. Make a list of all the credit card balance amounts and the corresponding interest rates. Develop a budget to determine if you can reduce any spending areas and where there may be money available to pay down debt.  Become austere and pare down expenses to the bare minimum to free up cash to pay off bills. Write out a plan ad stick to it.
  
  
• Sell Something. Go through closets, your garage and your basement. Inspect and evaluate whether you are using the items or just storing them. If you have items that still have value that you can part with sell them on eBay, hold a garage sale or sell them at the flea market. Use the money to beef up your reserve fund or to pay down debt.
  
  
• Remember the Past and Keep Optimistic for the Future. Realize that stock market fluctuations are an inherent part of the investment process. Position your portfolio where you can sleep at night and then let the market cycle run its course.
   

Gwendolyn V. Kirkland, CFP® has contributed financial advice to Essence, N’Digo, The Chatham Citizen, Money Magazine, Black Enterprise, Ebony, and The Bulletin. Have a question for Gwendolyn?  E-mail inquiries to This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .  To share your thoughts on the proposed government bailout of Wall Street, please comment below.

This interview obtained by chinika.com may not be published, broadcast, rewritten or redistributed without the prior written authority of Chinika, LLC .

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