While losses are painful, they're an inevitable part of investing in stocks, planners say. It's true that the stock market has always rebounded, even though it can take a decade or more to recover lost ground. What's past is past. What you have to do now is structure your portfolio in a way that makes sense. If you aren't sure how best to divide up your portfolio, look first to your retirement plan investment provider.
Many firms offer generic asset allocation recommendations.
Within the stock category you'll have to further choose among large-company stocks, smaller stocks and foreign stocks. It's then a question of the right mix. More aggressive investors in those same age brackets might choose to have less in bonds and cash, while a conservative investor might choose to have more. There are plenty of quizzes available on the Internet and in companies' human resources departments. But financial advisors say most people can determine their risk tolerance simply by monitoring how they feel about their recent losses.