Stocks as a whole will recover, even given the current state of the market, according to a recent question-and-answer session posted on CNN Money.com. While selling of stocks may boost your account balance in the short term, your returns over the long term will suffer and could ultimately lead to lower retirement income, says Walter Updegrave, a senior editor for Money Magazine.

Despite current conditions, Updegrave believes that the economy and markets will rebound, pointing to the fact that the U.S. has survived 10 recessions and various other financial crises since the 1940s. He says stocks are still a good bet because:

• They offer the long-term capital growth needed to generate adequate income for retirement
• Of the 73 rolling 10-year periods since 1926, stocks outgained bonds 85 percent of the time
• Stocks contribute to economic recovery and holding off on selling stocks can lead to great returns once recovery begins. (At the end of the 1982 recession, stock returns gained 59 percent over the next year, with 70 percent of that occurring over the first six months)

Updegrave advises investing in a mix of stocks and bonds, with risk based on your proximity to retirement. While younger participants can better recover from stock losses over the long term, those nearing retirement may want to adjust their mix to lessen their percentage in stocks and decrease their risk levels. For example, participants that are in their:

• 20s, 30s: Invest 80 to 90 percent in diversified stocks with rest in bond funds, stable value funds, etc.
• 50s: Invest 70 percent in stocks
• 60s: Invest 60 percent in stocks

NADART retirement plans offer a number of diversified investment options. For questions, please contact one of our representatives at (800) 462-3278, ext. 7161 or by e-mail at nadart401k@nada.org.