For the past several days I have been glued to the television getting the latest updates on the presidential campaign and the financial markets. Listen up! All this news can be hazardous to your wealth.

Here's the deal, we have been through several financial crises in the past and the markets still rise in the long run.

This is probably no consolation after reading the blaring headlines that pension funds have lost more than $2 trillion in value over the past several months. So what should you do with your retirement savings? Develop a wealthy mindset. You see, if you don't know history you really won't understand how to respond to market downturns? What goes up can go down and then up again. This is not the first time the financial markets have been in a tailspin.

How do I know? Been there-done this. ...



As a young stockbroker in the early 80's I marveled at how a line of clients waited outside of the office of one of the "high producing" stockbrokers. I listened as he advised his clients how personal computers would eventually be a staple in every household.

He explained how the companies that manufactured the memory chips inside would become the major corporations of the future. As his clients' portfolios increased four-fold in less than a few months they sang his praises and referred their families and friends. It wasn't long before I followed his lead investing my savings and those of my clients in the same companies. A few months later many of the stocks had lost more than seventy percent of their value.

We ended up selling for pennies on the dollar and let's just say I had many sleepless nights and questioned whether I had chosen the right profession.

Well if I had just held on for a few more years to those same stocks in Seagate Technology and Apple Computer, would have benefited when they became leading technology companies as the personal computer really did become a household staple. This was hard lesson but it taught me why you don't allow current circumstances to dictate your financial future.

Wealthy Mindset Tip #1

Don't Follow The Crowd. If you are worried about your 401k then now's the time to take a hard look at your risk tolerance. There is panic and uncertainty driving the financial markets right now. The current price of your stock or mutual fund reflects the value people will pay today. Don't allow fear to drive your decisions, and practice patience by focusing on your end game or when you will retire or send your child to college years from now. Still not feeling this? Shift some of your investments to more conservative types of investments like government bonds or bond funds.

Wealthy Mindset Tip#2

Problems are opportunities. The time to invest is not when stock or home prices have doubled in value. The best scenario is when prices have fallen significantly and have started to move in a positive direction. Hello. Take your cue from Warren Buffett who recently acquired Constellation Energy, and invested in General Electric and Goldman Sachs. Not everyone has the type of capital that Mr. Buffett has but if you are contributing to your retirement plans bi-weekly you are buying shares at these lower prices. As the market recovers you will have more shares and that's how you build wealth.

Wealthy Mindset Tip #3

Stay the Course. Your greatest enemy is within. Once you have decided on a specific investment strategy you have to stay committed to your path unless you have acquired specific information that alters the merits of your original decision. In the book 'Nickel and Dime Your Way to Wealth' I share how a parking attendant amassed a half million dollar portfolio in twenty years through several market and economic downturns. When the stock market crashed in 1987 he said, "I was wishing I had a few more nickel and dimes to purchase more shares. Read an excerpt at http://www.deborahowens.com

All the pundits are saying that it could take several years for the economy and financial markets to recover because of the continued turmoil in the financial and credit markets across the globe. It's time to tighten the purse strings and get your financial house in order. This too shall pass.
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Deborah Owens is host of Real Money which airs on the NPR affiliate WEAA 88.9 FM and is author of Nickel and Dime Your Way to Wealthy and Confident Investing. Visit her website at deborahowens.com