I remember the first time I experienced a drop in stock prices and the corresponding sticker shock of my earnings. I was 41 and had just started taking a real interest in my retirement plans. In my 30s, I was mostly focused on paying for a mortgage and paying down debt, not to mention raising a couple of kids. My statements would arrive, and I'd file them away. I don't know how many I actually looked at before that appointment with my financial adviser opened my eyes, but once the 2000 crash happened, I probably would have avoided some gray hairs and late nights if I stuck to the "ignorance is bliss" routine. 

Here's the thing about the stock market: it has highs and lows. My adviser eventually calmed me down and helped me to see that. And because I was still a good 20 years from retirement, I was able to weather that crash and eventually regain all the losses to my portfolio. So when 2008 rolled around, I felt like a veteran of the stock market. I kept my money invested and for the past few years, myself and my fellow investors have been enjoying a bull market. 

Having this history with the stock market has helped me these past few months, but I'll admit, there have been some concerns about how the recent fluctuations in stocks will affect my retirement. But here's the other piece of the puzzle...I'm not a couple of decades away from retirement anymore. I need to be concerned with short term investments, gains, and losses, and that's why my appetite for risk has dropped considerably the closer I get to that last day of "work". So I have a smaller portion of my retirement savings in stocks and more in bonds, IRAs, and certificates. 

There's really no golden formula for navigating the stock market, at least not one that I know about. It really depends on your very unique and individual situation, your financial goals, and your appetite and ability to handle risk. If you're losing sleep worrying about your portfolio, you have to consider whether sacrificing that peace of mind is worth the hoped for reward. I know that I sleep better knowing that a substantial portion of my retirement is "safe", while also knowing that a smaller portion of my earnings is working for me, and that is largely because I know I'll start drawing on those savings soon. Finding what works best for you might mean some research and some reflection on how much risk you can handle when it comes to your money, and it also could mean a trip to see your financial adviser. 

Preparing for retirement takes a lot of planning and it is frightening to see your investments drop at the mercy of the stock market. The best and most important thing that we can do is to keep our goals and plans in mind and educate ourselves on what's happening. While nobody can predict what the stock market will do tomorrow, you are able to control where and how you invest your savings. Finding that happy medium between sleepless nights and big financial rewards is the ultimate goal, and one that is going to be as unique and individual as you are.