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What should older investors do if they’re worried about the stock market? Financial planners weigh in

The New York Stock Exchange. Frank Franklin II/Associated Press/Associated Press

Don’t panic. Stick to your plan. Focus on long-term goals.

That’s some of the advice Massachusetts financial advisers are dishing out to anxious clients — many of them late-career baby boomers — who fear the market volatility will deplete the nest eggs they’ve accumulated to fund their retirement. While there’s no one-size-fits-all formula, almost everyone needs some handholding in tumultuous times.

“We earn our keep during the down times by talking people off the ledge,” said Dan Galli, founder of Daniel J. Galli & Associates of Norwell.

Many investors in their 50s or older may be tempted to pull money out of stocks as the market swoons, but trying to time the markets can be dangerous. Investors desperate to preserve their savings often bail before markets top out and remain on the sidelines when they bounce back from the bottom of the cycle, losing money on both ends.

Here are some tips for a precarious market, served up by the pros:


■  Don’t react to day-to-day financial news. Every blip in economic data, twist in global trade talks, and hints of the Fed’s interest rate leanings can jolt markets, but the jolts are often temporary and soon reversed. Even more sustained trends, such as market corrections and recessions, are less ominous when seen in the context of longer-term market movements.

■  Determine your “asset allocation” — how much of your investment portfolio you devote to riskier investments such as stocks and how much to relatively safer assets like bonds — based on your personal financial goals, your retirement timeline, and your tolerance for risk. Think about how much you’d be willing to lose (at least in the short term) during a market downturn, as well as how much you’d be willing to forego in gains by abandoning stocks.


■  As you approach retirement, consider creating two buckets of funds: one invested more conservatively that you can tap in the early post-employment years, and longer-term accounts with more growth potential that can carry you deeper into old age.

“It’s an unnerving time,” Norwell financial planner Karen Van Voorhis said. “But on the day they turn 65, most people aren’t going to liquidate all their assets.”

That’s not to say some investors shouldn’t make smart adjustments to their plans — such as shifting to lower-priced “value” stocks within their portfolios — as part of a “forward-thinking” approach, said Chris Boyd, founder of Asset Management Resources in Hyannis.

“People are talking more about political risk, what happens in an election year,” Boyd said. “Whether we’re on the cusp of a recession is yet to be seen, but we expect more volatility.”

Galli said two of his fretful clients pulled all of their money out of the market, against his advice.

“They’re sitting on a large pile of cash,” he said. “That’s where their comfort comes from.”

But many other investors have learned to be comfortable with some uncertainty.

“If people have a plan and they don’t need the money right away, they shouldn’t worry about market fluctuations,” said Eric Roberge, founder of Boston financial planning firm Beyond Your Hammock. “If they need to access all their money in the next year, they shouldn’t be in stocks.”

Robert Weisman can be reached at Follow him on Twitter @GlobeRobW.