In my opinion, that is very foolish advice. When you get your statement, read it, and if you feel it is needed re-adjust your portfolio for your risk tolerance.

If you are truly "investing for the long term" you are averaging down your price in a market like this. The economist is right that this could be a very long bear market, prices may go down further, continue to dollar cost average your portfolio and be prepared for the next run (assuming we get one).

In times like these, especially when looking at a retirement account, you MUST take a macro economic view. Look to the bigger picture. Do you think that our economy will come back, if so, do you feel that the stock market will recover with it? Yes, then invest, no, then get into gold or something tangible. Just do not panic. That is a foolish thing to do, hold on, be patient and invest for the long term.

If you are trading (not investing), good luck! Personally, I do both. My trading account is 100% cash right now. I'll be buying and selling securities over the next few days, however, my 401k is allocated in a way I feel is good for the long term. It has taking a beating over the past 10 days, but that is how the cookie crumbles. Allocate based on tolerance and age.

That last bit sounds like market-timing to me -- if you want to do that on your own for stock trading, that's fine, but don't do it with your 401K! Obviously stocks are *always* going to look cheap now but be cheaper later in a down market ... the problem is that missing those first days of an up market make a significant difference in your total return. If you've got 40 years (or even 10 to 15), I'd think it far better to just keep making regular contributions to a well balanced set of mutual funds (at least, that's what my wife & I are doing).

This is the problem with getting your financial advice from the local news: they try to cater to too many people in a very short period of time. Telling everyone to put their money into treasuries is terrible advice. For some, it might be a good call, but not for everyone. I really feel for the people that never paid attention to their stock/bond/CD allocation and are nearing retirement because there's really very little they can do at this point. Hopefully people will take these events and learn from them instead of getting scared away and never investing in stocks, which has happened in the past.

Because I am a glutton for punishment, I do look at my 401k balance. The only thing that keeps me from panicking is that I'm 18 years (well it's probably longer than that now) from retirement so I have time to recover my losses.

I've purposefully decided against tinkering with my allocations right now and am merely staying the course.

Gaurav here...Don't follow that moron's advice on ABC. I was a financial advisor for several years and one thing I always told my client was 'Don't to time the market.'

Just have a diversified portfolio that is realigned semiannually or annually because you will earn dividend or income thus the portfolio has to be re-aligned to maintain a proper balance and weighting according to the original diversification allocation.

But don't time the market in your work retirement plans...attempt that in your brokerage account only, if you wish.

Burying your head in the sand is not good advice. Yes, its tempting and I have turned CNBC off a few times in disgust. But I look at my portfolio and still like the companies I see. Their fundamentals and numbers are still sound. And if I wasn't in the process of moving and purchasing another home I'd be saving money to buy these same stocks I own, at a discount, in the near future.

I'm not an old person, but I remember the hard times in the early 90s, I remember downturns in the 80s and a few in the 70s. More importantly I've read a lot of financial history and I know what happens after a recession... the stock market goes back up and it goes even higher than before. This country is still one of the strongest markets in the world.

I decided to max out my 401k contributions for the rest of the year. We are only able to change our contribution percentage quarterly. I was contributing 10% of salary, but now I'm contribution 90%, the maximum.

I've lived well below my means so I have a very comfortable amount of savings, and I just got a credit card with a 0% interest rate for the next 9 months, which will help my savings absorb the impact of a much lower income.

I also have quite a few years before retirement (I'm 24).

Putting all of one's new 401(k) money into Treasuries at this time is about the worst possible decision. At these depressed prices, now's the time to be putting new money into funds. As Buffett says, the time to invest is when everyone else is running for the exits. Don't suspend your dollar-cost averaging approach to buying into the market right now, when prices are at their cheapest.

Not reading your statements isn't exactly the best sound financial advice you can get. As an adult, you realize that stocks are not only risky, but they are a gamble. They fluctuate. I bet Warren Buffet reads his statements. :)

I like this video from Juhn Jubak on MSN: link

Lehma Brother's yet to be settled accounting books is another piece of the puzzle. If Jubak is right, everyone who sells their stocks and moves to cash this month will get seriously screwed if there's a huge bounce at the end of October (selling low thing).

Agree with everyone else. Dumb move for those with long time horizons.