I watch the stock market and investment portfolios intently, it is my job. I see the inevitable ebb and flow of the market, and I also see a lot of clients who watch that ebb and flow and don't know how to handle it.

When the market is up, I know a few clients are probably at home with party hats and champagne bottles. When the market is down I picture those same clients throwing their computers out the window is disgust. So how can you stay cool with all the action going on in the market?

Don't get caught up in appearances.

First I would say don't worry about the day to day events. If you have a retirement portfolio, you are in this for the long run. For the most part you don't need to fret about the natural ups and downs that happen throughout the day; that is what I do! If you check your investment portfolio balance more than twice a day, we might need to have a talk about how the market works; it might save you some sleepless nights. The nature of investing is to be in it for the long haul. Saving for retirement is looking to the future, planning for the worst, and hoping for the best. Keep your focus on the overall goal, and not the "obstacles" in the way.

Time for a change?

Another good tip is to stay the course. If you have a portfolio customized for your needs, and it has been put through the ringer as far as performance scrutiny, don't go changing it over a 2 day lull, or a bad week. I see a lot of investors who get worried and want to change their whole investment plan because their profit in the first 2 months wasn't what they expected. Often times changing investments can cost you in fees and cause you to lose some of your initial capital because when you sell out of worry, you are often selling for less than you purchased for. Give your plan a chance to grow and work how it is supposed to. Unless your risk level is the equivalent of a craps table in Vegas, you aren't going to get rich or lose it all overnight. If you do feel a change is needed, talk to your advisor about it first, and ask yourself some questions. Why is a change necessary? Is this change going to help me reach my goals? How? When you have the answers, review them with your advisor.

Diversify!

An important strategy to make sure you don't lose it all overnight is Asset allocation. There are so many choices for where to put your money; stocks, bonds, real estate, hedge funds, precious metals… The list goes on. A good advisor will help you allocate your money in a few different areas, in investing the old adage proves true, "don't put all your eggs in the same basket." Properly diversifying your investments makes provision for the worst case scenario. For example, if all your money were invested in Apple Computers, you might be doing great today, but if Apple's stock takes a dive, you may want to take one too. That is an extreme example, but often times I meet with new clients who have their entire portfolio in stocks, which is very volatile. Sometimes everyone is invested in CD's and they have good returns but no liquid assets for emergencies. The best portfolios have a good mix of several areas of investment, providing good returns, liquidity, and stability.

Keep Saving!

Finally, keep saving. Don't be waist deep in the retirement pool. If your plan for retirement is going to become a reality, it needs funds. I know sometimes there are emergencies that require us to make some changes to our spending, and those have to be addressed and taken care of. What I would warn you against is just stopping investing for retirement because you can't see the results today. Keeping with it through doubt and worry is a theme that runs all through retirement planning. The extra couple hundred dollars in your pocket today, might mean having to work well into your 80's.