I have been thinking of writing this for some time now. I figured today is as good as any day. A lot of you are feeling the pain of the stock market. It’s been down for 6 days and looking to go down again. The Fed lowered rates from, I feel, a position of weakness and not strength. The financials are leading the markets lower (even though yesterday was pretty good for some).

So what do I do now? Bury my head in the sand? Move everything to cash and put it in a mayonnaise jar?

Did you do that when you were creating a budget? No, you took a deep breath assessed things and came up with a plan. When times started getting tough with the budget, did you abandon it? No, you worked through the pain.

So what should we do?

1) Continue to put money in your retirement accounts. Remember, this to shall pass. Dollar cost averaging is a powerful concept.

2) Review your funds. Are some of these dogs that have been under performing for years?

3) Review your allocation.

The best way to illustrate this is the internet bubble. Internet stocks are growth stocks and in the late 90’s just took off. Chances are your portfolio was overweight technology and mostly likely you were taking on more risk then you wanted or intended.

It might make sense to review your portfolio and make sure your allocations are in line to your target allocations. I know for my portfolio, I am currently overweight international and emerging market, while underweight domestic stock and REITs. I reallocate every 6 months and am scheduled to do so in the next 3 weeks.

There are 2 ways to rebalance your portfolio:

1) Buy and sell shares in your accounts.

2) Tweak your buying so you buy more of your underweight and less of your overweight.

Lastly, don’t panic. Come up with a game plan that works in good and bad times and stick with it.