The rapid global stock sell-off on Monday left individual investors feeling uneasy, even though markets rebounded the following day. The ongoing prediction of market volatility, expected to persist at least until the presidential election, is causing further unease, according to Doug Ornstein, a director at TIAA’s wealth management team. This anticipated turbulence is due to uncertainties surrounding the election, interest rates, economic indicators such as unemployment claims, and geopolitical issues.

However, if you have a 401(k), the key is to stay the course and not let short-term market fluctuations dictate drastic changes to your investment strategy. Market downturns and periods of volatility are typical and can present attractive buying opportunities for fund managers of your investments. Quincy Krosby, chief global strategist at LPL Financial, reminds us that opportunities often arise after challenging times.

Andy Smith, executive director of financial planning at Edelman Financial Engines, advises keeping emotions out of financial decisions, emphasizing that market fluctuations are normal. The focus should be on long-term market participation rather than trying to predict market timing, which is notoriously difficult. Ornstein points out that the market's best days often occur after its worst, and maintaining a consistent investment over the past two decades could have doubled your average annual returns compared to missing out on the 10 best days.

For 401(k) investors, the strategy is to save as much as possible, diversify your investments to reduce risk and volatility, and rebalance your portfolio if it deviates significantly from your intended asset allocation. Smith suggests an annual review to check for rebalancing needs, a step often overlooked. For example, if your initial portfolio was 70% stocks and 30% bonds and it has shifted to a 60/40 ratio, you may want to rebalance to align with your goals and time horizon.

For those nearing retirement within five to ten years, the advice is to continue saving and diversifying, but also to consider gradually reducing the risk in your portfolio by adjusting your stock allocation. And for those concerned about market volatility, it's important to remember that even during bear markets, stocks have shown long-term growth. The S&P 500, for instance, has seen an increase of over 80% from August 5, 2019, to the present, and since 1960, the S&P 500 has had more positive annual returns than negative ones, according to Smith.